THE NATIONAL GOVERNMENT’S total debt service bill increased more than fivefold from a year ago to P268.41 billion in March as principal payments surged, data from the Bureau of the Treasury (BTr) showed.

The March debt service bill was significantly higher than the P49.29 billion recorded in the same month in 2020.

BTr data showed amortization payments made up 82.2% of the total, and the rest went to interest payments.

Principal payments spiked by 3,478% to P220.75 billion in March from just P6.17 billion a year ago.

Broken down, P202.96 billion was paid to domestic lenders while payments to foreign creditors grew by 188% from a year ago to P17.79 billion.

The government did not settle any principal payments for its local debt in March 2020.

Interest payments likewise rose by 10.6% to P47.67 billion in March from P43.12 billion a year earlier.

This consisted of P39.23 billion in payments for domestic debt, up by 15% year on year, and P8.44 billion for foreign obligations, down by 4%.

For the first quarter, the government’s debt service bill increased by 53.4% to P521.51 billion from P339.98 billion in the same period last year.

The quarter’s total accounted for 41.4% of the programmed P1.26-trillion debt service bill for the entire year.

Principal payments, which accounted for three-fourths of the total, surged by 80% to P395.65 billion. Of which, P252.85 billion went to pay off local debt and the remaining P142.8 billion went to settle external debt.

For the first three months of 2021, interest payments grew by 24% to P125.86 billion from P119.88 billion. This made up of P90.6 billion in interest paid for domestic debt and P35.24 billion for foreign loans.

The government’s overall borrowings reached P1.4 trillion in the first quarter, up by 44.45% year on year.

The Institute of International Finance (IIF) warned last week that debt service will likely become a “greater burden” for many emerging economies including the Philippines amid high spending and low state revenues.

IIF data showed the share of government interest expense over their overall revenues will increase the most in the Philippines among 15 emerging markets studied. The ratio is projected to jump by nearly six percentage points in 2021-2022 from the level in 2018-2019.

Interest payments by the government accounted for 13.3% of state revenues in 2020, up from 11.5% in 2019 and the highest in four years or since 2016’s ratio of 13.9%, based on latest data from the Treasury. — Beatrice M. Laforga