THE government’s debt service bill nearly doubled in July because of increased amortization payments, the Bureau of the Treasury (BTr) said.

The national government’s total debt payments rose 95.84% year-on-year in July to P92.46 billion, and was higher compared to P83.81 billion paid out in June.

Interest payments in July amounted to P50.97 billion, up 13.66% from a year earlier.

Some 60% or P30.64 billion went to domestic creditors while payments made to foreign creditors totaled P20.33 billion.

Meanwhile, amortization payments amounted to P41.59 billion, significantly higher than the P2.37 billion paid a year earlier.

Of the total, P39.95 billion went to domestic lenders, including payments through the Bond Sinking Fund, while P1.55 billion worth of prepayments went to foreign creditors.

The government borrows from both domestic and foreign lenders to pay for public projects and programs not covered by its ability to generate revenue, thereby financing its deficit.

As of the end of July, the government made P477.71 billion in debt service payments, up 3.15% from a year earlier.

This accounted for 53.8% of the P887.91 billion debt service budget for 2019, based on the Budget of Expenditures and Sources of Financing (BESF) report.

Of the total, P246.68 billion was paid to settle principal obligations while interest payments amounted to P231.04 billion.

More than half of the total amortization bill or P137.12 billion for the period went to domestic lenders while P109.56 billion went to external creditors.

The breakdown of interest payments was 60% to domestic creditors and 40% foreign. — Beatrice M. Laforga