Gov’t debt service bill reaches P962B

THE NATIONAL GOVERNMENT’S debt service bill went up by 14.2% to P962.47 billion in 2020, driven by increased amortization payments, data from the Bureau of the Treasury (BTr) showed.

The BTr reported the government’s debt payments jumped from P842.449 billion in 2019, but fell 4.28% short of the P1.005-trillion programmed payments for the full year

In December alone, the debt service bill nearly doubled to P73.78 billion from the P37.19 billion recorded a year ago.

Amortization payments climbed 498% to P48.44 billion in December from P8.1 billion in the same month in 2019, due to the large redemptions made for maturing local obligations. Principal payments made up 65.7% of the total bill.

Domestic debt repayments surged to P41.52 billion in December from a mere P639 million in the same month in 2019. This includes the P26.64 billion sourced from the Treasury’s bond sinking fund, P4.1 billion paid for maturing Premyo bonds, and P9.57 billion worth of promissory notes to the central bank.

The government borrowed P540 billion from the Bangko Sentral ng Pilipinas (BSP) last year for its pandemic response but paid it back before the year ended.

Amortization payments for its maturing foreign debt slipped by 6.76% to P6.9 billion in December from P7.4 billion a year ago.

Meanwhile, interest payments also inched up by 13% year on year to P25.33 billion, accounting for 34% of the overall debt service bill.

Interest paid on its local debt fell by 9% to P23.61 billion while interest payments on maturing external obligations reached P1.72 billion, dropping by 45.6% year on year.

For the entire 2020, amortization payments made up 60.5% of the total service bill and the rest went to settle interests.

The government settled P582.1 billion for its principal obligations last year, up 20.85% from P481.58 billion in 2019.

Domestic debt repayments reached P440.4 billion, 27.9% higher year on year. The BTr repaid P141.65 billion of its maturing external debt in 2020, smaller than the P137.1 billion logged the year before by 3.3%.

Interest payments totaled P380.41 billion, up 5.4% from P360.87 billion in 2019.

For this year, the BTr has programmed a P1.26-trillion debt service bill, 31% higher than the actual bill in 2020.

The government’s total borrowings jumped by 168.63% year on year to P2.74 trillion last year. — Beatrice M. Laforga