THE NATIONAL Government settled P89.066 billion in debt payments in October, rising from a year earlier mainly due to higher interest payments and amortization, according to the Bureau of the Treasury (BTr).

Preliminary data from the BTr showed the government’s October debt service bill increased over three times from the P27.188 billion during the same month in 2020.

In October, the bulk of the payments or P57.53 billion went to amortization, which ballooned from the P5.118 billion a year ago.

Broken down, P52.706 billion or 91% were principal payments for local debt, while P4.824 billion went to foreign creditors.

At the same time, P31.536 billion went to interest payments in October. This was 42% higher than the P22.07 billion a year earlier.

Broken down, interest paid on local debt increased by 57.6% to P23.989 billion from P15.22 billion a year ago. This includes P1.18 billion in interest payments for Treasury bills, P18.402 billion for Treasury bonds, and P4.33 billion for retail Treasury bonds.

Interest payments on foreign debt increased by 10% to P7.547 billion from P6.85 billion.

For the first 10 months of 2021, the debt service bill jumped by 22% to P1.052 trillion from P861.904 billion in the same period of 2020.   

The National Government paid P682.043 billion for amortization, up 30% from P526.86 billion in the same period last year. This consisted of P458.109 billion for local debt and P223.934 billion for foreign debt.

As of end-October, interest payments went up by 10.7% to P370.884 billion, which includes P281.606 billion interest on domestic debt and P89.278 billion for interest on foreign debt.

The government borrows from both local and foreign lenders to plug the funding gap.

Gross borrowings as of October dropped by 6% to P2.75 trillion from a year earlier.

For 2021, the state has programmed a P1.26-trillion debt service bill, 31% higher than the P962-billion bill in 2020. — L.W.T. Noble

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