Philippines: Government debt payments more than double in July

MANILA, Philippines —  The national government spent P99.66 billion in July to settle its debt, a sharp 136 percent increase from P42.08 billion in the same period last year, the Bureau of the Treasury (BTr) reported yesterday.

This brought the national government’s debt service to P478.03 billion in the first seven months, down 13 percent from the P549.87 billion in the same period in 2016.

The government allots a portion of its budget for debt payments to settle obligations on a monthly basis, depending on their maturity.

Interest payments during the period increased 11.51 percent to P44.63 billion from P40.02 billion a year ago.

In an earlier statement, the Department of Budget and Management (DBM) said the increase in interest payments in July could be attributed to the earlier timing of payments this year, as well as the reissuance of five-year Treasury bonds and sale of new government securities.

“The increase, however, was tempered by some foreign debt instruments, which had matured,” the DBM said.

Of the amount used to pay interests in July, P25.48 billion went to domestic lenders, while the remaining P19.14 billion was paid to foreign creditors.

Debt payments form part of the government’s expenditures.

Based on the latest Budget of Expenditures and Sources of Financing document of the Department of Budget and Management, the government has programmed  a total of P647.27 billion for debt payment this 2017.

Of this amount, P334.87 billion is lined up for interest payment while P312.40 billion will be used for amortization.