Gov’t debt payments increase in February

Government debt payments rose by more than triple in February this year owing to higher amortization, data from the Bureau of the Treasury revealed yesterday.

Total debt servicing of the national government amounted to R86.57 billion in February 2017, up by 243 percent compared with R25.21 billion in the same month last year, the Treasury said.

Of the total, amortization skyrocketed to R62.34 billion during the month from only R3.93 billion last year, while interest payments jumped 14 percent year-on-year to R24.23 billion from R21.28 billion.

All principal payments made by the government in February went to offshore banks, the Treasury data showed.

Meanwhile, local interest payments hardly changed at R16.1 billion in February, but interest servicing to foreign creditors jumped by 59 percent to R8.13 billion from R5.12 billion in the previous year.

In the first two-months of the year, the government’s total debt payments declined by 15 percent to R156.58 billion from R186.17 billion in the same period last year.

Of that amount, interest payments fell to R66.58 billion, while amortization decreased to R90 billion.

At end-February last year, government interest and amortization payments stood at R66.87 billion and R119.29 billion, respectively.

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 payments 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.