The National Government (NG) experienced a notable increase in its debt payments in August of this year primarily due to higher amortization, data from the Bureau of Treasury showed over the weekend.

Preliminary data from the Bureau of the Treasury (BTr) showed the government paid P189.03 billion for debt servicing in August, up by 177.17 percent from P68.2 billion in the same month a year ago.

Month on month, debt payments increased from P64.36 billion in July.

Debt service payments refer to the funds a government needs to meet its financial obligations associated with a loan or any other form of debt.

In August, around 77.43 percent of debt repayments went to amortization, while the remaining 22.57 percent went to interest, the BTr said.

Overall amortization payments surged 290.09 percent to P146.35 billion in August from P37.52 billion in the same month last year.

Of the total amortization, the BTr paid P141.6 billion to domestic lenders and P4.7 billion to foreign creditors.

Interest payments increased by 30.77 percent year on year to 42.66 billion in August 2023 from P30.77 in August 2022.

Interest paid on foreign debt jumped by 26.49 percent to P13.13 billion from last year's P10.38 billion.

Interest on local debt likewise increased by 45.32 percent to P29.5 billion this year from P20.3 billion in 2022.

Domestic debt consisted of P17.85 billion in fixed-rate Treasury bonds, P8.88 billion in retail Treasury bonds, and P2.76 billion in Treasury bills.

Principal payments from January to August stood at P772,636 billion, up from last year's P342.77 billion. This consisted of P703.12 billion in domestic debt and P69.49 billion in foreign obligations.

Interest payments also reached P388.68 billion in the eight months ending in August. These included P261.42 billion worth of payments to domestic creditors and P127.25 billion to external creditors.