The Marcos administration lowered its debt service bill year-on-year in June due to a decrease in the payment of the government’s loan principal.
Latest data from the Bureau of the Treasury showed that the government reduced its debt payments in June, settling around P66.076 billion in obligations, a 25.25 percent decline from P88.401 billion in the same month a year ago.
Debt service refers to the payments made by the government to fulfill its obligations on both domestic and foreign debt.
Month on month, the government’s debt payments slightly decreased by 4.20 percent from P68.980 billion in May.
The bulk of June’s debt service bill went to interest payments at P55.643 billion. This was 5.21 percent higher from P41.34 billion in the same month a year ago.
Broken down, the government paid the interest for P13.844 billion in fixed-rate Treasury bonds (T-bonds), P19.183 billion in retail T-bonds, P2.298 billion in Treasury bills (T-bills), and P1.339 billion in other bonds.
The Treasury issues government securities on a weekly basis to raise funds for public programs and projects.
Short-term T-bills have maturities of 91 days, 182 days, and 364 days, while long-term T-bonds can have maturities extending beyond 20 years.
On the other hand, amortization or the settlement of principal declined by 70.62 percent to P10.433 billion from P35.517 billion last year.
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 P7.855 billion was remitted to foreign creditors.
Only P2.578 billion in principal payments were made to local sources.
SIX-MONTH DEBT SERVICE
Meanwhile, the debt service bill of the Marcos administration swelled by 42.06 percent during the first six months of the year due to higher interest and amortization payments.
The government settled P1.282 trillion of its obligations during January to June, higher than P907.927 billion in the same period last month.
The principal payments totaled P905.559 billion during the first half of the year, 44.78 percent higher than P625.469 billion last year.
Amortization settled in the period January-to-June period went to local lenders at P757.433 billion, 34.91 percent higher year-on-year from last year’s P561.421 billion.
The national government paid P109.188 billion in amortization to foreign creditors during the first half of the year, a 21.89 percent increase from P89.574 billion last year.
The government paid P377.228 billion for the interest costs during the first six months of the year, a 33.57-percent increase from last year at P282.458 billion.
Broken down, the government paid P757,433 billion in borrowing costs to local creditors, up by 34.91 percent from last year’s P561.421 billion.
Interest expense on foreign liabilities increased to P148.126 billion from P64.048 billion the previous year. (TCSP)
