Debt servicing by the Philippine government jumped 203 percent in November due to higher interest and principal payments, data from the Bureau of the Treasury revealed.
The national government's debt payments hit P81.34 billion in November last year, that is 203 percent more than the P26.79 billion paid out in the same period in 2020.
Debt servicing refers to payments of both interest and principal. The debt service burden excludes actual outflows such as rescheduling or refinancing of existing debt and conversion of debt to equity.
During the month, amortization accelerated from only P6.75 billion a year earlier to P50.02 billion. Of that amount, domestic creditors cornered P43.07. billion, while foreign lenders secured the remaining P6.95 billion.
Meanwhile, interest payments by the government increased 42 percent to P31.22 billion last November from P20.03 billion in the same month in 2020.
Based on the Treasury data, the government paid out P27.54 billion in interest to local banks while P3.67 billion payments were made to offshore creditors.
The November debt servicing brought the national government’s total payments in the first 11 months to P1.134 trillion, higher by 27 percent compared with P888.69 billion in the same period a year earlier.
Total amortization from January to November reached P732 billion, an increase of 37 percent from P533.61 billion.
On the other hand, interest payments went up by 20 percent to 402.1 billion from P355.08 billion.
Earlier, the treasury reported that the Philippines managed to cut new borrowings in November last year due to significantly lower financing from domestic creditors.
Borrowings by the government reached P26.69 billion in November, down by 78 percent compared with P124.03 billion in the same month in 2020.
While the bulk of the amount of additional borrowing was sourced locally at P16.6 billion, this level of financing was way below than the P114.83 billion recorded a year earlier.
As of November 2021, the total outstanding debt stood at P11.931 trillion.
However, the end-November debt level was P39.7 billion or 0.3 percent lower compared with P11.971 trillion in October last year.
The decline in debt was primary driven by the P26.9 billion redemption of government securities, or IOUs, held by local creditors.
In addition, stronger peso also helped in lowering the government’s foreign obligations.
But compared with the outdating debt in November 2020, the total amount jumped 17.7 percent year-on-year from P10.134 trillion.
Of the total debt stock, 70.7 percent were domestic borrowings, while 29.3 percent were sourced from externally sources.