Debt service payments as of September exceed budgeted amount for 2020

THE National Government’s debt service payments surged in September, bringing the nine-month total past the P1.005-trillion budgeted for the year, according to the Bureau of the Treasury (BTr).

It said the government’s debt service bill hit P1.135 trillion in the nine months to September, more than double the P558.22 billion paid out a year earlier.

September debt service rose 665% to P374.1 billion, which was also up 146% compared with August.

Amortization accounted for 88% of the total while the rest went towards interest.

Principal repayments were up 5,573% at P330.7 billion in September after the government settled its outstanding debt from the central bank which had been incurred through a repurchase agreement worth P300 billion.

In early October, the Monetary Board of the Bangko Sentral ng Pilipinas approved another loan tranche to the government of P540 billion in provisional advances.

The BTr also paid P24.56 billion of its maturing debt to local creditors, serviced by its bond sinking fund.

Amortization payments to domestic creditors totaled P324.56 billion, or 98% of the overall amortization bill. There were no principal repayments made on domestic debt in September 2019.

Meanwhile, interest payments rose by less than one percent to P43.37 billion. The breakdown was 83% to domestic creditors and the rest to foreign.

Interest paid on domestic debt was P35.8 billion, up 4.26% from a year earlier, with P21.12 billion servicing Treasury bonds, P13.05 billion for retail Treasury bonds and P1.64 billion for Treasury bills.

The BTr also paid P7.57 billion in interest on foreign debt, down 13.5% year on year.

The nine-month debt service bill has also surpassed the 2019 bill of P842 billion.

Amortization payments more than tripled year on year to P821.74 billion in the nine months.

Principal repayments on domestic debt accounted for 85% of the total or P698.56 billion.

Interest payments hit P312.97 billion, up 6.5% year on year. Interest paid on domestic debt totaled P224.28 billion, or 72% of the total.

The government plans to borrow P3 trillion from both domestic and foreign lenders this year to plug the budget deficit, which is seen widening to 9.6% of economic output. — Beatrice M. Laforga