Government debt payments hit P69 billion in May
![Government debt payments hit P69 billion in May](https://media.philstar.com/photos/2024/07/14/5_2024-07-14_18-54-39.jpg)
MANILA, Philippines — The government jacked up its debt service to almost P70 billion in May with the bulk going to interest payments from both domestic and foreign lenders.
Data from the Bureau of the Treasury showed that the administration hiked its debt payments in May, settling some P68.98 billion, up by 40.6 percent from the P49.05 billion in the same period last year.
Almost 90 percent of the debt service was for interest payment at P61.1 billion. This is a 48 percent increase from the P41.34 billion paid in the comparative period.
On the other hand, payment for amortization or the settlement of principal inched up by 2.3 percent to P7.88 billion from P7.7 billion in May 2023.
Spending on amortization goes to returning the loan principal, while interest payments go to complying with interest obligations.
Meanwhile, about 75 percent of the interest payments at P46.07 billion were issued to domestic creditors.
Broken down, the government paid the interest for P26.5 billion in fixed-rate Treasury bonds (T-bonds), P16.87 billion in retail T-bonds and P2.08 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 P15.03 billion in interest owed to foreign financiers in May.
For amortization, almost the entire allocation was remitted to foreign creditors amounting to P7.8 billion.
The remaining P85 million in principal payments were made to domestic sources.
For the five-month period, debt payment surged by 48 percent to P1.22 trillion from P819.53 billion in January to May 2023.
The five-month amortization payment at P895.13 billion is higher by 52 percent than the P589.95 billion in the comparative period.
For January to May, interest payments also rose by 40 percent to P321.59 billion.
As of end-May, the government has settled 64 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 has been pushed to a record P15.3 trillion as of end-May largely due to the weakening of the peso.
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