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The national government’s debt service bill fell by a third in July due to a drastic reduction in amortization payments, data from the Treasury Office (BTr) showed.
According to the latest Treasury data, government debt payments reached P60.91 billion in July, 34% less than the P92.46 billion paid in July 2019. However, it is 77% higher than the P34.4 billion paid in June.
Repayments plummeted 96% to P1.527 billion in July after BTr failed to pay off any major debt with its local creditors that month. The total amount was used to pay off the principal of its external debt, which is 1.42% lower year on year.
Interest payments increased 16.5% to P59.38 billion, with 58% for domestic lenders and the rest for external sources.
Interest paid on its local debt reached $ 34,390 million, an increase of 12.2% year-on-year. Broken down, P1.47 billion went to pay interest on Treasury bills, P28.59 billion for Treasury bonds and P4.33 billion for retail Treasuries.
So far this year, the government debt service bill has dropped 15% to P608.26 billion. This represents 60.5% of the P1.005 trillion debt payments scheduled for all of 2020.
Principal repayments accounted for 59% of the total, while the remaining 41% went to interest payments.
Amortization jumped 26% to P361.2 billion, while interest payments decreased 24% to P247.06 billion.
In 2019, total debt payments reached P842.45 billion, up 16% year-on-year.
The government aims to borrow P3 trillion from both domestic and foreign lenders this year to cover the budget deficit, which is forecast to rise to 9.6% of gross domestic product amid the economic slowdown.
Separate data from the Treasury showed that its gross loans totaled P1.857 trillion from January to July, increasing 121% year-on-year.
Excluding debt payments, net government loans stood at P1.681 trillion in the seven-month period, 131% more than a year ago. – Beatrice M. Laforga
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