THE government’s debt service bill declined by 10% in May, as both amortization and interest payments fell, the Bureau of the Treasury (BTr) reported.

Data from the BTr showed the National Government made debt payments worth P24.642 billion in May, down 10.09% from P27.407 billion paid in the same month last year. This was also lower than the debt service bill of P148.34 billion in April.

Interest payments made up 74.48% of the total, with 25.52% allocated for principal repayments.

For amortization, the government allotted P6.289 billion, lower by 18.73% from P7.738 billion a year ago. These were all paid to external creditors in May.

Interest payments also declined by 6.69% to P18.353 billion from P19.669 billion a year ago. Local lenders were paid P14.466 billion, broken down into P7.73 billion in interest payments for fixed-rate Treasury bonds, P4.86 billion for retail Treasury bonds and P1.876 billion for Treasury bills.

The remaining P3.887 billion went to interest payments to foreign lenders.

In five months to May, the government’s total debt service bill hit P512.96 billion. This is 49.54% of the programmed P1.033-trillion debt payments target for 2020, based on the Budget of Expenditures and Sources of Financing report.

This includes P352.845 billion in amortization and P160.115 billion in interest payments.

In 2019, total debt payments reached P842.449 billion, up 16.1% from P725.589 billion settled in 2018.

The government borrows from both domestic and foreign lenders to plug the budget deficit which is seen widening to 8.4-9% of gross domestic product this year as economic activity slows down amid the crisis.

Separately, BTr data showed gross borrowings reached P1.509 trillion from January to May, already exceeding the P1.02 trillion raised for full-year 2019.

Excluding the repayments made, net borrowings totaled P1.342 trillion during the five-month period.

The economic team projected that borrowings for this year will be higher than the initial plan to raise P1.4 trillion. However, there is no revised borrowing program released so far. — B.M.Laforga