Gov’t debt payment down 32% to P174 B in Jan-Apr

MANILA, Philippines - The country’s total debt payments declined by nearly 32 percent to P174.19 billion in the first four months of the year from a year ago as payments for principal debt fell significantly during the review period, latest data from the Bureau of Treasury Shocoal.

The amount spent in debt servicing continued to be lower as payments for principal debt fell significantly from January to May 2014.

Of the total government spent P57.67 billion for principal payment including P984 million in domestic loans and P56.68 billion in foreign obligations.

Total principal payment in the four months was  56.8 percent lower than the P133.55 billion recorded a year earlier.

Interest payments, on the other hand, amounted to P116.53 billion,  4.49 percent lower than the P122.01 billion a year ago.  These comprised P75.08 billion in local borrowings and  P41.44 billion in foreign debt.

In April alone, the government spent P16.08 billion for debt payments, 46.28 percent lower than the 30.24 billion settled in the same month last year.  Of the total, P13.4 billion was used to pay interest while principal payment accounted for the balance of P2.68 billion.

Domestic borrowings are done mainly through the sale of Treasury bills and bonds during weekly auctions held by the BTR.

Foreign borrowings mainly comprise loans obtained from development lenders which include the World Bank, Asian Development Bank and the Japan International Cooperation Agency, World Bank and Asian Development Bank.

For this year, the  government has earmarked  P791.5 billion for public debt servicing.  The amount accounts for 34 percent of the proposed 2014 national budget of P2.268 trillion.

Of the total,  P352.7 billion will be used to cover interest payments -- P248.4 for domestic debt and P104.3 billion for foreign borrowings.  The amount  is 5.6 percent higher than the P333.9 billion programmed for 2013.  

For principal payments, the government is expected to spend about P438.8 billion. This includes P350.9 billion for domestic debt servicing.