The Duterte administration’s debt payments went up by more than half in the first three-months of the year owing to higher amortization, data from the Bureau of the Treasury revealed over the weekend.
Based on the Treasury report, the total debt service of the national government reached P521.5 billion in January to March this year, an increase of 53 percent compared with P340 billion in the same period last year.
Bulk of the debt payments went to amortization, hitting P395.65 billion in the first quarter. That amount was greater by 80 percent than the P220.1 billion total registered a year ago.
Amortization to local debts doubled to P252.85 billion from P124.72 billion, while foreigners cornered P142.8 billion, higher by 50 percent compared with P95.37 billion in the first-quarter of 2020.
Interest payment, on the other hand, rose by five percent to P125.85 billion at end-March from 119.88 billion in the previous year. Of that amount, P90.61 billion was cornered by domestic creditors, while the remaining balance of P35.24 billion was paid to offshore banks.
In March alone, the government’s debt payments amounted to P268.41 billion, significantly higher compared with P49.29 billion in the same month last year.
Debt servicing in March 2020 was abnormally low due to limited work days as the entire Philippines placed under strict lockdowns, or enhanced community quarantine.
Interest payments in March last year reached P47.66 billion, while amortization totaled P220.74 billion.
Last week, the Institute of International Finance (IIF) warned that debt payments may become a “greater burden” for many emerging economies, like the Philippines, as higher spending is seen to remain elevated while government revenues dwindle.
“While global financing conditions remain strongly supportive, pandemic-related spending increases and revenue losses have made debt service a greater burden for many EMs (emerging markets) including the Philippines,” the IIF said in its Global Debt Monitor report.
In the first-quarter, the national government’s borrowings reached P1.381 trillion, up 43 percent from P810.03 billion in the same period last year.
As of March 2021, the total outstanding debt of the government stood at P10.77 trillion, higher by 27 percent compared with P8.48 trillion a year earlier.