By Beatriz Marie D. Cruz, Reporter
THE NATIONAL Government’s (NG) debt service bill fell by 25.25% in June as amortization payments declined, the Bureau of the Treasury (BTr) said.
Data from the BTr showed that the NG’s debt repayments dropped to P66.08 billion in June from P88.4 billion in the same month a year ago.
Month on month, the debt service bill also dipped by 4.21% from P68.98 billion in May.
The debt service refers to payments made by the National Government on its domestic and foreign debt.
The bulk or 84.21% of the total debt service bill in June went to interest payments.
BTr data showed that interest payments for the month climbed by 5.22% to P55.64 billion in June from P52.88 billion a year ago.
Broken down, interest paid on local debt slid by 8.98% year on year to P36.66 billion.
Domestic interest payments consisted of P13.84 billion in fixed-rate Treasury bonds, P19.18 billion in retail Treasury bonds (T-bonds), P2.3 billion in Treasury bills (T-bills), and others (P1.34 billion).
Interest paid on foreign obligations surged by 50.58% to P18.98 billion in June from P12.6 billion in the same month a year ago.
On the other hand, amortization during the month dropped by 70.63% to P10.43 billion from P35.52 billion a year earlier.
Domestic principal payments fell by 90.79% to P2.58 billion in June from P27.98 billion in the same month in 2023.
Amortization on foreign debt rose by 4.23% to P7.86 billion in June from P7.54 billion a year ago.
The lower year-on-year debt repayments may be linked to the peso depreciation and higher funding needs amid a “persistent” budget deficit, Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera said in a Viber message.
“It can also be due to reallocation of funds to finance areas requiring attention such as recovery from the dry spell and other calamities that hit in June,” he added.
The NG’s budget deficit narrowed by 7.24% to P209.1 billion in June from P225.4 billion a year ago, the BTr said.
FIRST-HALF BILLMeanwhile, the debt service bill in the first half of the year rose by 41.29% to P1.28 trillion from P907.93 billion in the same period a year ago.
Principal payments accounted for more than 70.59% of the total in the first half.
In the January-to-June period, amortization payments rose by 44.78% to P905.56 billion from P625.47 billion in 2023.
Principal payments made on domestic debt reached P757.43 billion, while payments for foreign obligations reached P148.13 billion during the period.
Meanwhile, total interest payments during the first six months increased by 33.55% to P377.23 billion from P282.46 billion last year.
Foreign interest payments in the first six months amounted to P109.19 billion, while domestic interest payments stood at P268.04 billion.
In the first half, interest payments made to the domestic market include P170.5 billion in fixed-rate Treasury bonds, P74.66 billion in retail Treasury bonds, P15.78 billion in T-bills, and others at P8 billion.
In a Viber chat, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that the debt service bill could decline in the coming months amid lower maturities of government securities for the remainder of the year.
The NG plans to borrow P630 billion from the domestic market in the third quarter.
Broken down, the BTr is looking to raise P260 billion from T-bills and P370 billion via T-bonds in the period.
The NG’s debt stock rose to a fresh high P15.48 trillion as of end-June from P15.35 trillion as of end-May.
Under the latest Budget of Expenditures and Sources of Financing, this year’s debt service program is set at P2.03 trillion.
