THE NATIONAL GOVERNMENT’S (NG) debt service bill soared in August as amortization and interest payments surged, the Bureau of the Treasury (BTr) reported.
The latest data from the Treasury showed that the debt service bill more than tripled (256.96%) to P664.72 billion in August from P186.22 billion in the same month last year.
Month on month, the debt service bill also went up by 515.17% from P108.06 billion in July.
Debt service refers to the payments made by the government on domestic and foreign borrowings.
In August, amortization payments more than quadrupled (350.86%) to P601.62 billion from P133.44 billion in the same month in 2024.
The bulk or 90.51% of the debt payments in August were made up of amortization payments, BTr data showed.
Principal payments on domestic debt surged by 389.93% to P597.89 billion in August from P122.03 billion a year ago.
Amortization paid on foreign debt, on the other hand, slumped by 67.29% to P3.73 billion in August from P11.4 billion in the same month a year ago.
On the other hand, interest payments increased by 19.56% to P63.11 billion from P52.78 billion a year earlier.
Domestic interest payments went up by 17.82% to P46.38 billion in August from P39.36 billion in the same month last year.
This was composed of P24.85 billion for fixed-rate Treasury bonds, P16.87 billion for retail Treasury bonds, and P4.62 billion for Treasury bills, and others (P34 million).
Interest payments for foreign borrowings climbed by 24.65% to P16.73 billion in August from P13.42 billion a year prior.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort attributed the larger debt service bill to the P516-billion government securities (GS) that matured in August.
“This is an unusual increase in NG principal payments,” he said in a Viber message over the weekend.
END-AUGUSTFor the first eight months of the year, the NG debt service bill inched down by 0.6% to P1.54 trillion from P1.55 trillion in the same period last year.
The eight-month tally was 75.01% of the P2.05-trillion debt service program this year.
Amortization payments, which made up the bulk of the total, declined by 8.07% to P956.74 billion as of end-August from P1.04 trillion a year ago. This was 79.32% of the P1.21-trillion full-year amortization program.
Principal payments on domestic debt slipped by 12.63% to P768.52 billion, while external payments increased by 16.84% to P188.22 billion.
Meanwhile, interest payments went up by 14.66% to P584.15 billion in the January-to-August period from P509.44 billion in the same period a year ago.
This was 68.88% of the P848.03-billion programmed interest payments for 2025.
Interest payments on domestic debt stood at P429.12 billion, 18.31% higher year on year than P362.72 billion a year ago.
Of the total interest payments on domestic debt, P292.14 billion went to fixed-rate Treasury bonds, P99.71 billion to retail Treasury bonds, P30.36 billion to Treasury bills (T-bills), and others (P6.91 billion).
On the other hand, external debt inched up by 5.66% to P155.03 billion in the first eight months from P146.72 billion a year ago.
Mr. Ricafort said the government is still on track to meet its P2.05-trillion debt service program.
He said the debt service bill may have gone up in September as P288 billion in Treasury bonds matured.
“After that, no more large NG GS maturities for the rest of 2025. Next large GS maturities that would increase NG debt servicing would be in February 2026 and April 2026 at P200 billion each,” Mr. Ricafort said. — Aubrey Rose A. Inosante
