THE National Government’s debt service bill rose 15.46% in September as both interest payments and amortization increased, the Bureau of the Treasury (BTr) said. 

The BTr reported that debt service amounted to P238.999 billion in September.

Month on month, debt service rose 26.4% from P189.027 billion in August.

Principal payments during the month rose 13.9% year on year to P167.551 billion.

Domestic debt payments rose 16.02% to P148.883 billion.

Amortization on foreign obligations fell 0.55% year on year to P18.668 billion.

Meanwhile, interest payments stood at P71.448 billion, up 19.28% from a year earlier. 

Interest on domestic debt rose 17.14% to P55.892 billion.

Domestic interest payments consisted of P28.602 billion for fixed-rate Treasury bonds, P25.62 billion for retail Treasury bonds, and P1.67 billion for Treasury bills.

Interest paid on foreign debt rose 27.7% to P15.556 billion.

Meanwhile, the debt service bill in the nine months to September rose 57.37% year on year to P1.4 trillion.

Principal payments accounted for 67% of the total.

Amortization payments in the January-to-September period rose 91.93% to P940.187 billion.

Interest payments during the period rose 15.04% year on year to P460.124 billion.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that the higher debt service bill was due to the government bonds that needed to be redeemed in recent months.

“Furthermore, higher interest rates also led to higher borrowing costs,” he added.

Last month, the Monetary Board raised borrowing costs by 25 basis points (bps) in an off-cycle move, bringing the benchmark interest rate to a 16-year high of 6.5%.

Since May 2022, the central bank has hiked rates by a cumulative 450 bps.

“The government’s debt service budget this year is set at P1.552 trillion — P941.353 billion in amortization payments and P610.665 billion in interest.”Luisa Maria Jacinta C. Jocson