Debt payment cut to P52 billion in February

MANILA, Philippines — The Marcos administration reduced its debt service by more than 80 percent to P52 billion in February amid the decline in payment for the loan principal borrowed by the government.

Latest data from the Bureau of the Treasury showed that the government slashed its debt payments in February, settling some P52.15 billion in obligations from P293.62 billion in the same period last year.

About 93 percent or P48.45 billion of the debt service was for interest payments, inching up by 1.3 percent from P47.83 billion a year ago.

Nearly 90 percent of the interest payments at P42.07 billion were issued to domestic creditors.

Broken down, the government paid the interest for P20.74 billion in fixed-rate Treasury bonds, P16.87 billion in retail T-bonds and P4.42 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 P6.38 billion in interest owed to foreign financiers in February.

On the other hand, amortization or the settlement of principal dropped by nearly 100 percent to just P3.71 billion from P245.79 billion in February 2024.

Almost the entire payment for amortization at P3.59 billion was remitted to external sources. Only P121 million in principal payments were made to domestic creditors.

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

For the two-month period, debt payments plunged by 65 percent to P158.66 billion from the P452.51 billion in January to February 2024.

The two-month amortization payment at P5.78 billion is 98 percent below the P330.47 billion in the comparative period last year.

For January to February, interest payments, however, rose by 25 percent to P152.88 billion from P122.05 billion.

As of end-February, the government has settled 7.7 percent of its total debt service for 2025, which is at a record P2.05 trillion.

This year, the government intends to spend P848.03 billion for interest payments on a 74:26 mix in favor of domestic creditors. It will also return P1.2 trillion worth of principal to comply with the amortization of debts mostly to local lenders.

The country’s outstanding debt is at a record P16.63 trillion as of end-February.