Debt payments soar to P1.48 trillion

95 percent of programmed obligations settled

MANILA, Philippines — The Marcos administration jacked up its debt payments to P1.48 trillion as of end-October, settling about 95 percent of its programmed obligations for the year.

Data from the Bureau of the Treasury showed that the government hiked its debt payments by 59 percent to P1.48 trillion from January to October.

This means that as of end-October, the government had settled 95.3 percent of its total debt service for 2023, which was at a record P1.55 trillion.

This is divided into an 80:20 mix in favor of domestic creditors.

During the period, 65 percent of the debt service was allocated for amortization or the settlement of the principal amount at P958.96 billion.

This is nearly double the P496.5 billion paid in the same period last year.

As such, the government exceeded the P941.35 billion worth of principal to comply with the amortization of debts programmed for 2023.

On the other hand, interest payments increased by 20 percent to P519.11 billion during the 10-month period.

This is equivalent to 85 percent of the expected P610.67 billion spending earmarked for interest payments for 2023.

Amortization expenditures are directed toward repaying the loan principal, while interest payments are allocated to fulfilling interest obligations.

For amortization, the bulk of it at 89 percent, amounting to P853.94 billion was remitted to domestic creditors.

The remaining P105.02 billion in principal payments were made to foreign sources.

Meanwhile, close to 70 percent of the interest payments at P356.93 billion were issued to domestic creditors.

Broken down, the government paid the interest for P222.66 billion in fixed-rate Treasury bonds, P116.38 billion in retail T-bonds and P13.8 billion in Treasury bills.

The Treasury sells government securities every week to generate funding for public programs and projects.

Short-dated T-bills have tenors of 91, 182 and 364 days while long-term T-bonds have maturities of up to over 20 years.

Aside from payment to local lenders, the government settled P162.17 billion in interest owed to foreign financiers.

As of end-October, the national debt had risen to a record P14.48 trillion.