Debt service bill hits P1.2 trillion in 2021

THE NATIONAL Government’s debt service bill jumped by a fourth to P1.2 trillion in 2021 as amortization payments climbed, data from the Bureau of the Treasury (BTr) showed.

The BTr said the government’s debt payments rose by 25% from P962.5 billion the previous year. Last year’s total was just under the P1.28-trillion debt service budget for 2021.

In December alone, the debt service bill stood at P69.9 billion, down by 5% from the same month in 2020.

Amortization payments accounted for 60.9% of the total debt service bill in December, after slipping by 11.9% to P42.66 billion.

Principal payments to foreign creditors that month amounted to P6.3 billion, while those to domestic lenders totaled P36.36 billion.

Meanwhile, interest payments in December grew by 7.9% to P27.33 billion.

Broken down, interest paid on domestic debt reached a total of P24.18 billion, up by 2.4% year on year.

These payments consisted of P12.79 billion in retail Treasury bonds, P9.2 billion in fixed-rate Treasury bonds, and P1.07 billion in Treasury bills.

On the other hand, interest paid on external debt surged by 82.6% year on year to P3.14 billion.

The government borrows from foreign and local sources to plug its budget deficit as it spends more than it makes to support programs that will stimulate economic growth.

As for the full-year 2021, amortization payments made up 64.3% of the total debt service bill, while the rest went to settle interests.

Amortization payments in the period jumped by 33.1% to P774.73 billion.

Broken down, principal payments made to external sources reached P237.19 billion, up by 67.4% year on year. Those made to domestic lenders rose by 22% to P537.54 billion.

On the other hand, interest payments as of the end of last year increased by 12.9% to P429.43 billion.

Interest paid to domestic debt in 2021 hit P333.34 billion, jumping by 19.5% year on year. In contrast, interest payments on external debt slipped by 5.2% to P96.1 billion.

The government’s borrowings reached P2.58 trillion in 2021, declining by 5.9% year on year. — J.P.Ibañez