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Philippines: Debt payments surge to P152 billion in August
MANILA, Philippines — The national government’s debt payments surged almost five-fold to P152.4 billion in August following the settlement of matured domestic securities during the period, according to the Bureau of the Treasury.
Based on the latest data from the BTr, total debt payments in August soared by 383 percent to P152.4 billion from P31.58 billion in the same month last year.
This brought the government’s total debt service to P760.65 billion from January to August, nearly 50 percent higher than last year’s P509.3 billion.
Treasury data showed that the jump in debt payments in August was caused by the redemption of government bonds, with amortization swelling by 985 percent to nearly P130 billion from P11.97 billion a year ago.
The bulk, or P127.79 billion, of the amount was used to settle the principal payments on matured domestic government securities. The remaining P2.06 billion went to foreign lenders.
Year-to-date, spending for debt amortization rose by nearly 90 percent to P491 billion from P258.7 billion in the same period last year.
The BTr said P374 billion of the amount was paid to domestic lenders, while P117 billion went to external creditors.
Meanwhile, interest payments reached P22.55 billion in August, a 15 percent increase from P19.61 billion last year.
In an earlier statement, the BTr said the increase was due to the coupon payment for three-year retail Treasury bonds (RTBs) issued in February, as well as other issuances this year.
This brought the total interest payments to P269.61 billion in the first eight months, 7.57 percent higher than last year’s level of P250.65 billion.
The BTr earlier said this accounted for 10 percent of total expenditures during the period, lower than the 11.33 percent recorded in 2019. Interest payments as a percentage of total revenues, meanwhile, increased to 14 percent from 12 percent last year due to lower collections.
The government allocates a portion of its budget for the settlement of obligations on a monthly basis, depending on their maturity.
Including other expenditures, disbursements from January to August grew by 21 percent to P2.67 trillion from P2.21 trillion last year.
On the other hand, revenues dropped by 7.67 percent to P1.93 trillion in the first eight months from P2.09 trillion in the same period last year.
To bridge the country’s fiscal deficit, which is expected to reach P1.82 trillion or 9.6 percent of the gross domestic product this year, the government plans to borrow up to P3 trillion from both domestic and foreign lenders.
Source: https://www.philstar.com/business/2020/10/12/2048824/debt-payments-surge-p152-billion-august