Debt payments up 46% to P56.55 B in April

The country’s debt payments grew nearly half in April as the government paid more for principal obligations.

Data from the Department of Finance showed the government spent P56.55 billion in April to pay its debt, up 46 percent from P38.72 a year ago.

Expenditure for debt servicing has increased in the past few months as payments for principal debt went up.

Of the P56.55 billion, P40.87 billion went to principal obligations comprising P38.07 billion in domestic debts and P2.81 billion in foreign borrowings.

Total principal payment was 61.4 percent higher than the P25.32 billion paid out a year earlier.

The government, likewise, paid P15.68 billion in interest, 17 percent more than the previous year’s P13.4 billion.

From January to April, total debt payments amounted to P262.01 billion, 13 percent higher than the P231.95 billion in payments made in the same period last year.

As of end-April, P116.29 billion worth of interest was paid on top of the P145.72 billion in amortization.

Debt-management strategies, coupled with efforts to shore up tax collections, have allowed the government to significantly trim its debt burden to a more manageable level.

The country borrows from the international and domestic markets to augment revenues and finance development programs.

The government’s outstanding debt stood at P5.79 trillion as of the end of April, 2.7 percent higher than the P5.64 trillion recorded in the same period last year.

Domestic debt amounted to P3.85 trillion, representing an increase of 4.5 percent. The amount accounted for 68 percent of the country’s total obligations.

The country’s debt as a proportion of the economy declined further last year, reflecting the government’s successful efforts to manage finances and sustain the growth of the economy.

Debt-to-GDP (gross domestic product) ratio improved to 45.4 percent at the end of 2014 from 49.2 percent in 2013 due to efficient spending.

The debt-to-GDP ratio, which peaked at 78.1 percent during the 1998 Asian currency crisis, has been on a downward trend in the past three years as the government stepped up efforts to manage the country’s debt.