Debt servicing of the national government increased last year year due to higher interest payments, data from the Bureau of the Treasury showed.

The Marcos administration’s debt payments reached P1.293 trillion from January to December 2022, up seven percent from P1.204 trillion paid out in the previous year.

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.

Payment of interest rose by 17 percent to P502.85 billion from P429.43 billion in 2021.

Principal payments consist mainly of domestic payments amounting to P383.45 billion. This is up 15 percent against the P333.33 billion registered a year ago.

Interest servicing to foreign creditors, on the other hand, jumped 24 percent to P119.4 billion from P96.1 billion.

Meanwhile, amortization payments inched up by two percent to P790.32 billion from P774.64 billion in 2021.

Of the total, domestic principal payments reached P659.83 billion, 22 percent higher compared with year ago’s P537.66. billion.

Foreign amortization, meanwhile, decreased by 45 percent from P327.19 billion in 2021 to P130.48 billion last year.

In December alone, debt payments amounted to P302.12 billion, up by more than fourfold compared with P69.99 billion a year ago.

Of that amount, interest and principal payments reached P43.6 billion and P258.52 billion, respectively.

Earlier, the Department of Finance said the government plans to gradually bring down its debt ratio to 51 percent level by the end of the Marcos administration.

For 2022, the government’s debt-to-gross domestic product (GDP) ratio dropped 60.9 percent, below the 61.8 percent target of the Marcos Administration.

Under the Medium-Term Fiscal Framework (MTFF), the government (NG) aims to bring down the debt-to-GDP ratio to less than 60 percent by 2025 and further down to 51.1 percent by 2028.