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GOVERNMENT debt payments from January to October almost doubled this year compared to the same period in 2019.
Data from the Treasury Office showed that the government’s debt service bill for the 10-month period shot up to P1.16 trillion from P583.42 billion in the comparable period a year ago.
This was already above the government’s scheduled debt service this year at $ 1.005 trillion. In 2019, government debt payments only amounted to P842,449 million.
For the January-October period, amortization tripled to P826.86 billion from just P268.955 billion a year ago, while interest payments increased to P335.044 billion, which is 6.54 percent higher. than P314.465 billion last year.
Domestic amortization, which included actual repayments of principal to local creditors, including those served by the Bond Amortization Fund and the Central Bank’s Board of Liquidators, stood at P698,885 million for the 10-month period.
Meanwhile, external amortization, which included prepayments made for bond swap operations, reached $ 127.975 million.
Of the total amount paid for interest payments from January to October, $ 39.501 billion was used to settle internal loans, while $ 95.543 million was spent on interest payments on external loans.
For October alone, the government spent a total of P27.188 billion on debt service, an increase of 7.88 percent from P25.202 billion in the same month last year.
Interest payments made by the government during the month of October were recorded at P22.07 billion, an increase of 6.49 percent from P20.724 billion last year.
On the other hand, the government paid a total of P5,118 million for amortizations in October of this year. This was 14.29 percent more than the P4.478 billion last year.
Amortization refers to repayment of the loan principal over time, while interest payment refers to a payment determined by the interest rate on an account.
Gross loans from the national government from January to October this year had already reached P3.22 trillion, in breach of the P3 trillion loan program established by the national government this year to finance its spending needs and the budget deficit amid the Covid-19 pandemic.
However, as the government expects an increase in revenue collection and disbursements, the Cabinet-level Development Budget Coordination Committee (DBCC) announced earlier this month that it had lowered its projection for the budget deficit from this year from 9.6 percent of GDP to 7.6 percent of GDP. this year.
The country’s outstanding debt at the end of October already amounted to P10.028 trillion, which is just over a hundred billion below the level of outstanding debt of P10.16 trillion that economic managers had previously projected for this year.
The DBCC also previously projected that the country’s debt-to-GDP ratio this year would rise to 53.91 percent of GDP, a level it had not seen in over a decade, from a record low of 39.6 percent of GDP on last year.
For next year, the government has also scheduled to borrow another P3 trillion. Economic managers also expect outstanding debt to rise further to P11.98 trillion and the country’s debt-to-GDP ratio to rise to 58.28 percent.
