Gov’t debt payments down by half in January

According to the Treasury, the government’s foreign debt rose by 6.3 percent year-on-year during the month to R2.222 trillion from R2.09 trillion a year before due to foreign exchange fluctuation.

The Treasury said that foreign currency denominated debts jumped after the peso weakened against the US dollar from R47.56 to the greenback to R50.25.

Of the total obligation, debt securities amounted to R1.371 trillion, while loans stood at R851.57 million.

Meanwhile, the government’s debt in the domestic market increased by 3.5 percent in February to R3.985 trillion from R3.85 trillion in the previous year.

Total government securities issued to banks reached R3.984 trillion at endFebruary, while the remaining balance of R598 million went to loans.

The national government debt payments dropped by more than half in the first month of the year due to lower amortization, data from the Bureau of the Treasury, showed.

In January, the Duterte administration settled R70 billion worth of debts, down by 56.5 percent compared with R160.96 billion in the same month last year.

During the month, the government paid R42.35 billion in interest, a decrease of 7.0 percent year-on-year from R45.59 billion. Of that amount, domestic creditors received R21.32 billion, while offshore lenders got R21.32 billion.

On the other hand, the amortization paid by the government to its creditors declined by a hefty 76 percent in January to R27.65 billion from R115.36 billion last year. Of that total, R27.59 billion went to foreign lenders, while the remaining R640 million went to local creditors.

For 2017, the Department of Budget and Management (DBM) has earmarked R647.28 billion for debt service, lower by 18 percent compared with R789.96 billion last year.

Under this year’s debt service expenditure program of the Duterte administration, the government plans to spend R334.87 billion for interest payment and R312.4 billion for principal amortization.

Last year, the national government debt servicing fell short of the R815.77 billion target by 3.1 percent, which is also lower by less than 1.0 percent compared with R797.25 billion in the previous year.

Earlier, the Treasury reported that the national government’s total outstanding debt in local and overseas markets stood at R6.208 trillion as of February this year.

The end-February figure was higher by 4.5 percent compared with R5.94 trillion in the same month last year.