Despite some improvements in the national government’s debt payments in May, over half a trillion pesos was still slashed from total payments in the first five months of the year, resulting in a 42.4 percent decline by end-May.

Data from the Bureau of the Treasury (BTr) showed that the Marcos administration’s total debt financing only amounted to ₱703 billion from January to May, a decline of ₱517 billion compared to the ₱1.22 trillion recorded in the same period last year.

Like last month, a sharp drop in principal payments or amortization significantly contributed to the massive decline.

It fell to ₱345.6 billion, starkly contrasting with the ₱895.1 billion the Marcos administration paid in the first five months last year. This is equivalent to a ₱549.5 billion or 61.4-percent drop.

Notably, the government’s payments to domestic creditors dropped steeply by 77.4 percent from ₱754.9 billion a year earlier. It only paid ₱170.4 billion in the January-to-May period, unchanged from April as the government made zero payments to domestic lenders in May.

Foreign lenders, however, received ₱175.2 billion as of end-May, up 24.9 percent from ₱140.3 billion last year. Despite this improvement, the government’s meager increase in its principal payments to foreign creditors could not offset the massive deflation in domestic payments.

Meanwhile, the government’s interest payments increased to ₱357.4 billion as of end-May, from ₱321.6 billion a year ago. This translates into a 11.1-percent increase year on year.

Both interest payments to domestic and foreign creditors saw increases. Payments to domestic lenders jumped by 12.9 percent to ₱261.3 billion during the period, from last year’s ₱231.4 billion worth of domestic payments.

Broken down, ₱178.9 billion of the payments went towards fixed-rate Treasury bonds (T-bonds), ₱60.1 billion to retail T-bonds, ₱18.7 billion to Treasury bills (T-bills), and ₱3.6 billion to other national government obligations.

Its interest payments to foreign debt sources inched up by 6.5 percent to ₱96.1 billion from ₱90.2 billion.

Total debt payments in May alone jumped by 15.9 percent to ₱80 billion from ₱69 billion in April 2024. Despite the surge, it remained the lowest monthly payment in three months, next to February’s ₱52.2 billion.

During the month, government creditors received ₱70 billion in interest payments, higher by 14.6 percent from ₱61.1 billion a year prior. Amortization also jumped by 27.9 percent to ₱10.1 billion in May from ₱7.9 a year ago.

For the five-month period, the Marcos administration has reduced its gross borrowings by 6.3 percent to ₱1.33 trillion from ₱1.42 trillion in the same period last year du to the relatively lower borrowings from domestic lenders

As of end-May, gross borrowings accounted for 52.2 percent of the government’s total planned borrowings of ₱2.55 trillion for the year.