THE NATIONAL Government paid P75.086 billion in debt in August, falling by half from a year earlier as amortization payments declined, the Bureau of the Treasury (BTr) reported.

Preliminary BTr data showed the government’s debt service bill slid by 50.73% from P152.396 billion in the same month in 2020.

Around 68.13% of total debt repayments went to amortization, while the rest went to interest payments.

Total interest payments rose by 6.13% to P23.93 billion in August, as the government increased local borrowings amid the pandemic.

Broken down, interest paid in local debt increased by 8.67% to P21.3 billion, consisting of P11.88 billion in Treasury bonds, P7.94 billion in retail Treasury bonds, and P1.46 billion in Treasury bills.

In contrast, interest paid on foreign debt fell by 10.75% to P2.63 billion.

Amortization payments plummeted 60.6% to P51.15 billion from P129.85 billion in the same month last year.

Broken down, amortization paid to local lenders plummeted to P171 million from P127.79 billion last year. Payments to foreign creditors surged to P50.98 billion from P2.06 billion last year.

For the first eight months of the year, the debt service bill jumped by 19.56% to P909.41 billion from P760.07 billion in the same period last year.

Amortization payments accounted for 67.95% of the total, while the rest went to interest payments.

Interest payments increased by 8.12% to P291.49 billion, including P217.51 billion in interest for local debt and P73.98 billion interest paid in foreign debt.

Amortization payments from January to August rose by 25.84% to P617.92 billion from P491.05 billion a year earlier. This included P405.4 billion in payments for local debt and P212.52 billion paid to external creditors.

In 2020, the National Government’s debt service bill went up by 14.2% to P962.47 billion as amortization payments rose.

The government borrows from foreign and local sources to fund its budget deficit as the state spends more than the revenue it generates to support programs that will stimulate economic growth.

The state has programmed a P1.26-trillion debt service bill this year, 31% higher than in 2020. — Jenina P. Ibañez