Debt payments slashed to P76 billion

MANILA, Philippines — The Marcos administration reduced its debt service by 88.5 percent to P76 billion in August amid the decline in domestic amortization payments, the Bureau of the Treasury (BTr) said.

Latest data from the Treasury showed that the government slashed its debt payments in August, settling P76.12 billion in obligations, lower than the P664.72 billion in the same period last year.

Amortization, or the settlement of principal, dropped by 98.3 percent to P10.5 billion from P601.62 billion in the same period in 2025. The entire payment for amortization was remitted to external sources.

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

On the other hand, 86.2 percent or P65.62 billion of the debt service was for interest payments, inching up by nearly four percent from P63.12 billion a year ago.

Most of the interest payments were issued to domestic creditors at P56.12 billion in August. The amount was 21 percent higher than P46.38 billion in August 2025.

Broken down, the government paid the interest for P29.19 billion in fixed-rate Treasury bonds, P21.09 billion in retail T-bonds and P5.84 billion in T-bills.

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

Meanwhile, the government settled P9.49 billion in interest owed to foreign financiers in August, down by 43.3 percent from P16.73 billion in the same month last year.

For the eight-month period, debt payments dipped by 6.4 percent to P1.44 trillion from P1.54 trillion in January to August 2025.

The end-August amortization payment at P756.32 billion was 20.9 percent lower than the P956.74 billion in the comparative period last year.

Interest payments, however, rose by 17.5 percent to P686.48 billion from P584.15 billion year-on-year.

As of end-August, the government has settled 70.5 percent of its total debt service for 2026, which is at P2.05 trillion.

This year, the government intends to spend P995.61 billion for interest payments and P1.05 trillion for amortization, according to the Department of Budget and Management’s Budget of Expenditures and Sources of Financing for fiscal year 2027.

The country’s outstanding debt is at a record P19.61 trillion as of end-August.