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Philippines: Debt payments soar 41% to P774 billion in H1
MANILA, Philippines — The government hiked its debt payments in the first semester by more than 41 percent to P774 billion due to double-digit increases in interest payments and amortization.
According to the Bureau of the Treasury, debt servicing in the first half went up by 41.37 percent to P773.78 billion from P547.34 billion during the same period last year.
Amortization accounted for over 73 percent of the total at P565.25 billion while interest payments made up the remaining 27 percent at P208.53 billion.
Broken down, amortization ballooned by 57.15 percent from P359.67 billion a year ago due to a rise in domestic liabilities. Also, interest payments inflated by 11.11 percent from P187.67 billion due to yields taken by investors from the purchase of government securities.
In the first semester, domestic amortization jumped by nearly 65 percent to P405.23 billion as repayments to creditors serviced by the bond sinking fund surged by around 90 percent to P352.12 billion, from P185.18 billion.
On the other hand, bulk of interest payments at P159.335 billion were channeled for debts on the local end, especially fixed rate Treasury bonds (P93.92 billion) and Retail Treasury Bonds (P51.17 billion).
In June, debt servicing increased by more than fourfold to P150.19 billion from P34.28 billion in the same month last year. Amortization zoomed to P120.27 billion, from just P6.82 billion a year ago, while interest payments rose by roughly nine percent to P29.92 billion, from P27.56 billion.
Spending on amortization goes to returning the loan principal, while interest payments go to complying with interest obligations.
The government plans to increase its debt servicing this year to P1.79 trillion, with 70 percent of the amount aligned to amortization. Last year, debt payments grew by over 14 percent to a record P962.48 billion, from P842.44 billion in 2019.
On the other hand, the government intends to increase the borrowing program to P3.02 trillion this year from P3 trillion last year to fund its pandemic measures, especially vaccination, in an effort to achieve herd immunity by yearend. Bulk of the debt will be secured locally at P2.58 trillion, while P442.36 billion will be requested externally.
As of end-June, the state’s outstanding debt ballooned to an all-0time high of P11.16 trillion.
Source: https://www.philstar.com/business/2021/08/16/2120178/debt-payments-soar-41-p774-billion-h1