MANILA, Philippines - Debt payments climbed by 20 percent to P329.30 billion in the first five months of the year from P271.74 billion a year ago as the government made more principal payments for its liabilities, the Bureau of Treasury reported yesterday.
Principal payments surged 46-percent to P192.382 billion during the five-month period from P131.62 billion a year ago.
BTr data showed P152.50 billion in principal payments were made for domestic loans during the period, while the remaining P39.88 billion were for foreign borrowings.
Meanwhile, the two-percent decline in interest payments to P136.92 billion from P140.12 billion only partly offset the increase in principal payments.
In May alone, debt payments surged 69 percent to P67.252 billion from P39.716 billion a year ago.
Principal payments ballooned 188 percent to P46.626 billion in May from P16.201 billion last year, while interest payments tumbled 13 percent to P20.626 billion from P23.594 billion.
About 90 percent, or P60.33 billion, of the principal and interest payments were made for loans borrowed from domestic sources, while the remaining P6.922 billion went to foreign loans.
The government has been able to lower its debt-to-GDP (gross domestic product) ratio to 45.4 percent as of 2014 from 49.2 percent in 2013 through various debt-management efforts. This metric has peaked at 78.1 percent during the Asian financial crisis in 1998.
Expectations on further improving its debt metrics have allowed the Philippines to enjoy investment-grade credit ratings from the world’s biggest debt watchers, Standard & Poor’s, Moody’s, and Fitch Ratings.
The government borrows to augment revenue collections and pay for social services and economic development programs and projects.
Latest data showed outstanding government debt rose three percent to P5.82 trillion in June from P5.65 trillion in the same month last year.