Debt service payments rise sharply in February
THE GOVERNMENT’S liability spending in February grew more than 243% on rising foreign principal payments, according to the Treasury bureau.
The national government in February spent P86.573 billion on amortization and interest payments, up 243.3% from a year earlier.
Month on month, debt servicing grew from the P70 billion recorded in January.
The surge in debt spending was primarily driven by payments on maturing global bonds amounting to P57.978 billion.
This raised principal payments — which accounted for 72% of total debt service — to P62.343 billion, against P3.935 billion a year earlier.
No principal payments were made to domestic sources in that month.
Interest payments on the other hand grew 13.9% to P24.23 billion in February.
Local creditors received P16.096 billion in interest — accounting for 66% of total interest payments.
The government paid out P14.041 billion to holders of maturing Treasury bonds, P1.881 billion to holders of retail treasury bonds, and P174 million to holders of Treasury bills.
The two-month tally for debt service was P156.579 billion, down 16% from a year earlier.
According to the Budget of Expenditures and Sources of Financing (BESF) report, the government plans to spend P647.28 billion on debt service, or about 19% of the P3.35 trillion 2017 budget.
About 48% or P312.403 billion is programmed for principal payments while the remaining P334.876 billion is for interest payments.
Budget Secretary Benjamin E. Diokno has said that the country will work to reduce the debt burden to 35%- 37% of gross domestic product from 44.7% in 2015. The government will maintain an 80%-20% financing mix in favor of domestic sources until 2022. —