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Philippines: Debt payment up 42% in H1
MANILA, Philippines — The government spent P547.35 billion in the first half to settle matured debt from both domestic and foreign lenders, according to the Bureau of the Treasury (BTr).
The latest figure was more than 42 percent higher than the P385.25 billion recorded in the same period last year.
For June alone, the government’s debt service amounted to P34.39 billion, 59 percent lower than the P83.81 billion in the same period in 2019.
The government allots a portion of its budget to settle its obligations on a monthly basis, depending on their maturity.
Based on Treasury data, nearly 66 percent of the total debt service in the first six months went to principal payments, while the remaining 34.3 percent was interest payments.
Amortization jumped by 75.3 percent to P359.67 billion from P205.18 billion in the same period last year.
Of the amount, P246.11 billion went to domestic lenders, up by 153.37 percent from P97.17 billion a year ago. No principal payment was made in June.
Another P113.46 billion was paid to external creditors, 5.05 percent higher than the P108.01 billion recorded last year.
Meanwhile, interest payments in the first semester climbed by 4.22 percent to P187.68 billion from P180.07 billion in the same period in 2019.
In a separate statement, the BTr said total interest payments in the first half was lower than the original program of P226.2 billion, generating savings amounting to P38.5 billion.
Interest payments as a percentage of revenues rose to 13 percent from 11.64 percent last year.
About P134.49 billion of the total interest payments went to domestic lenders, while the remaining P53.18 billion was paid to external creditors.
In the first half, the national government’s disbursements increased by almost 27 percent to P2.01 trillion from P1.59 trillion in the same period in 2019. The amount, however, is 8.58 percent short of the target spending of P2.2 trillion.
On the other hand, revenues declined by 6.09 percent to P1.453 trillion in the first half from P1.55 trillion last year. This is, however, slightly higher than the revised target of P1.452 trillion.
As a result, the country incurred a fiscal deficit amounting to P560.4 billion in the first six months, significantly wider than the P42.6 billion shortfall recorded a year ago.
To bridge the country’s fiscal deficit, which is expected to reach P1.82 trillion or 9.6 percent of gross domestic product, the government plans to borrow up to P3 trillion from both domestic and foreign lenders this year.
As of end-June, the national government’s outstanding debt has reached a new record high of P9.054 trillion, 1.8 percent higher than the P8.89 trillion recorded a month earlier.
Source: https://www.philstar.com/business/2020/08/10/2034069/debt-payment-42-h1