Government settles 91.6% of debt service for 2024

MANILA, Philippines —  The Marcos administration increased its debt payments to P1.86 trillion as of end-October, settling more than 90 percent of its programmed obligation for the year.

Data from the Bureau of the Treasury showed the government raised its debt payments by 25.7 percent from the P1.48 trillion in the same period last year.

As of end-October, the government had settled 91.6 percent of its total debt service for 2024, which is at a record P2.03 trillion. This is divided into a 77:23 mix in favor of domestic creditors.

During the 10-month period, 65.6 percent of the debt service was for amortization or the settlement of the principal amount at P1.22 trillion. This is 27.3 percent higher than the P958.96 billion paid in the comparative period.

As such, the government has returned 96.8 percent of the P1.26 trillion worth of principal to comply with the amortization of debts programmed for 2024.

Interest payments, on the other hand, grew by 23 percent to P638.68 billion from P519.11 billion in the January to October period last year.

This is equivalent to 83.7 percent of the expected P763.44 billion spending earmarked for interest payments for 2024.

Spending on amortization goes to returning the loan principal, while interest payments go to complying with interest obligations.

For amortization, the bulk of the amount at 83 percent, amounting to P999.74 billion was remitted to domestic creditors. The remaining P222.22 billion in principal payments went to foreign sources.

More than 70 percent of the interest payments at P453.46 billion were issued to domestic creditors.

Broken down, the government paid the interest for P296.49 billion in fixed-rate Treasury bonds, P117.87 billion in retail T-bonds and P28.4 billion in Treasury bills (T-bills).

The Treasury sells government securities every week to generate funding for public programs and projects.

Short-dated T-bills have tenors of 91 days, 182 days and 364 days while long-term T-bonds have maturities of up to over 20 years.

Aside from payment to local lenders, the government settled P185.22 billion in interest owed to foreign financiers in the 10-month period.