Phl debt service bill falls in April

The national government’s (NG) debt service bill fell by 21.03 percent in April due to a decline in amortization payments, the Bureau of the Treasury (BTr) said. 

Data from the BTr showed that the NG’s debt service bill declined to P161,695 billion in April from P204,763 billion in the same month a year ago.

Month on month, debt repayments also declined by 69.69 percent from P533.523 billion in March.

The bulk or 58.25 percent of the total debt service bill in April went to amortization.

Principal payments during the month slipped by 40.57 percent to P94.199 billion from P158.510 billion a year earlier.

Domestic debt payments stood at P55.097 billion in February, lower by 64.21 percent from P303.461 billion in the same month in 2023.

However, amortization on foreign obligations soared at P39.102 billion from P4.551 billion a year ago.

Meanwhile, interest payments climbed by 45.92 percent to P67.496 billion during the month from P46.253 billion a year ago.

Broken down, interest on local debt jumped by 67.30 percent year on year to P46,427 billion from P21.924 billion.

Domestic interest payments consisted of P38.437 billion in fixed-rate Treasury bonds, P3.575 billion in retail Treasury bonds, P2.703 billion in Treasury bills, and P1.712 billion in other bonds.

Interest paid on foreign debt went up by 13.86 percent to P21.069 billion in April from P18.503 billion in the same month a year ago.

Sought for insights, Rizal Commercial Banking Corp. chief economist Michael Ricafort said the NG debt service bill declined year-on-year partly as a function of lower debt maturities paid, both principal and interest payments.

"Possible U.S./global/local rate cuts this year would help temper if not reduce interest payments and overall debt servicing," Ricafort told DAILY TRIBUNE in a Viber message.

Debt service for Jan-Apr

Total debt service during the four-month period soared to P1.147 trillion from last year's P770.479 billion.

In the January-April period, amortization payments increased by 52.38 percent to P887.243 billion from P582.249 billion in 2023.

Principal payments made on domestic debt reached P243.763 billion, while payments for foreign obligations reached P86.702 billion during the period.

Meanwhile, foreign interest payments amounted to P260.488 billion during the first four months of the year, up 38.38 percent from the same period last year.