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Philippines: Debt payments hit P513 billion in 5 months
MANILA, Philippines – The national government spent P512.96 billion from January to May to pay off its maturing domestic and external debt, according to the Bureau of the Treasury (BTr).
According to the latest report from the Treasury, total debt service from January to May jumped by 70 percent from P301.44 billion in the same period last year.
For May alone, debt payments reached nearly P25 billion, 10 percent lower than the P27.41 billion a year ago.
The government allots a portion of its budget for the settlement of obligations on a monthly basis, depending on their maturity.
Based on Treasury data, 69 percent of the total debt service in the first five months came in the form of principal payments, while the remaining 31 percent was interest payments.
Amortization, surged by 135 percent to P352.85 billion from P150.47 billion in the same period last year.
About P246 billion of the amount went to domestic lenders, while P107 billion was paid to external creditors.
Meanwhile, interest payments amounted to P160 billion, six percent up from P151 billion last year.
Despite this, the BTr earlier said interest payments comprised 9.62 percent of the total expenditures as of end-May, declining from last year’s 11.49 percent.
On the other hand, interest payments, as a percentage of revenues, went up to 14 percent from 11.5 percent a year ago on account of lower collections, the Treasury said.
The bulk or P109.88 billion of the total interest payments was paid to domestic lenders, while P50.24 billion went to external creditors.
Debt payments form part of the national government’s expenditures.
In the first five months, the national government’s disbursements rose by 26 percent to P1.664 trillion from P1.314 trillion in 2019.
On the other hand, revenues as of end-May declined by 16 percent to P1.102 trillion from P1.31 trillion in the same period last year.
This resulted in a fiscal deficit of P562.2 billion in the first five months, significantly wider than the budget gap of P809 million in the same period in 2019.
To bridge the deficit, the government is ramping up its borrowings, with P1.51 trillion already borrowed from January to May.
As a result, the Philippines’ outstanding debt as of end-May also reached a record high of P8.89 trillion.
Source: https://www.philstar.com/business/2020/07/20/2029163/debt-payments-hit-p513-billion-5-months