Debt payments made by the government decreased in February due to lower principal payments made to domestic creditors, data from the Bureau of the Treasury showed.

The national government's debt servicing reached P293.61 billion last February, 22 percent lower than the P375.71 billion paid out in the same month last year. This brought the two-month total payments to P452.51 billion.

Debt servicing refers to the payments made to pay off both the interest and the principal amount of a debt. It, however, does not include actual outflows, such as the rescheduling or refinancing of existing debt or the conversion of debt to equity.

Interest payments rose 40 percent to P47.82 billion during the month from P34.10 billion a year earlier. Total interest payments so far this year reached P122.04 billion.

Of the total, domestic and foreign interest payments reached P34.35 billion and P13.47 billion, respectively.

Payment of principal, on the other hand, declined by 28 percent to P245.78 billion from P341.60 billion last year, consisting of domestic payments of P243.62 billion and foreign payments of P2.1 billion.

The February debt servicing brought the national government’s total payments in the first two months to P452.51 billion, higher by 7 percent compared with P423.545 billion in the same period a year earlier.

As of February, the total outstanding debt stood at P15.18 trillion.

The end-February debt level was P39 billion or 0.3 percent higher compared with P14.79 trillion in January.

This year, the national government intends to borrow P2.46 trillion, with the majority of this sum to be obtained from the domestic market.

Broken down, P1.84 trillion or 75 percent is set to be borrowed by the government locally, while the remaining 25 percent, equivalent to P615 billion, will be financed by foreign creditors.

Under the administration’s Medium Term Fiscal Framework, the government aims to shrink the debt-to-GDP ratio to less than 60 percent by 2025 and further reduce it to 51.1 percent by 2028.