Debt payments decline to P294 billion in February
![Debt payments decline to P294 billion in February](https://media.philstar.com/photos/2024/04/21/11_2024-04-21_18-45-58.jpg)
MANILA, Philippines — The Marcos administration reduced its debt service to P294 billion in February amid the decline in the payment for the loan principal borrowed by the government.
Latest data from the Bureau of the Treasury showed the government slashed its debt payments in February, settling some P293.62 billion in obligations, from P375.71 billion in the same period last year.
Bulk of the debt service was for amortization or the settlement of principal at P245.79 billion. This was nearly 30 percent lower than the P341.61 billion paid in February 2023.
On the other hand, interest payment soared by 40 percent to P47.83 billion from P34.11 billion in the comparative period.
Spending on amortization goes to returning the loan principal, while interest payments go to complying with interest obligations.
Almost the entire payment for amortization at P243.63 billion was remitted to domestic creditors.
Only P2.16 billion in principal payments were made to external sources.
Meanwhile, a little over 70 percent of the interest payments at P34.35 billion were issued to domestic creditors.
Broken down, the government paid the interest for P21.68 billion in fixed-rate Treasury bonds (T-bonds), P7.73 billion in retail T-bonds and P3.26 billion in Treasury bills (T-bills).
The Treasury sells government securities every week to generate funding for public programs and projects.
Short-dated T-bills have tenors of 91 days, 182 days 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 P13.48 billion in interest owed to foreign financiers in February.
For the two-month period, debt payments inched up by seven percent to P452.51 billion from the P423.55 billion in January to February 2023.
The two-month amortization payment at P330.47 billion is slightly lower by four percent than the P342.47 billion in the comparative period.
For January to February, interest payments, however, jumped by 50 percent to P122.05 billion from P81.08 billion.
As of end-February, the government has settled 24 percent of its total debt service for 2024 which is at a record P1.91 trillion.
This is divided into a 77:23 mix in favor of domestic creditors.
The government intends to spend P670.47 billion for interest payments and return P1.24 trillion worth of principal to comply with the amortization of debts mostly to local lenders as well.
Currently, the country’s outstanding debt is at a record P15.18 trillion as of end-February.
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