The debt servicing bill of the Marcos administration swelled during the first six months of the year due to higher interest and amortization payments, the Bureau of Treasury (BTr) said.

Data from the BTr showed that the government settled P1.282 trillion of its obligations during January to June, 42.06 percent higher than P907.927 billion in the same period last month.

Debt service refers to the payments made by the government to fulfill its obligations on both domestic and foreign debts.

Analyzing the recent cash operations report from the BTr, the significant rise in debt payments during the first half of the year was driven by substantial principal payments totaling P905.559 billion, 44.78 percent more than the amount compared to the previous year, when the government paid P625.469 billion.

BTr data showed most of the amortization settled in the period January to June went to local lenders, which received P757.433 billion in principal payments from the government. This was 34.91 percent higher year-on-year from last year’s P561.421 billion.

The national government paid P109.188 billion in amortization owed to foreign creditors during the first half of the year, up by 21.89 percent year-on-year from P89.574 billion.

Figures from the BTr also showed the government spent P377.228 billion in the period January to June to pay for interest costs, representing a 33.57-percent increase from last year at P282.458 billion.

Borrowing costs

Broken down, the state paid P757,433 billion in borrowing costs to onshore creditors during the first half of the year, up by 34.91 percent from last year’s P561.421 billion, while interest expense on foreign liabilities increased to P148.126 billion from P64.048 billion the previous year.

In June alone, the government’s debt service bill declined by 25.25 percent due to lower amortization payments.

The same BTr data showed that debt payments declined to P66.076 billion in June from P88.401 billion in the same month a year ago.

Month on month, debt payments dropped by 4.20 percent from P68.980 billion in May. The bulk or 84.21 percent of June’s debt service bill went to interest payments.

Interest payments inched up by 5.21 percent to P55.643 billion in May from P41.34 billion in the same month a year ago.

Interest paid on domestic debt declined by 8.9 percent to P36.664 billion from P40.280 billion a year ago.

Meanwhile, interest payments to foreign creditors grew by 50.57 percent to P18.979 billion in May from P12.604 billion a year ago.

Principal payments plunged by 70.62 percent to P10.433 billion from P35.,517 billion last year.

Month on month, amortization increased by 32.34 percent from P7,883 billion in May.

Broken down, amortization on domestic debt in May dropped by 96.8 percent to P85 million from P2.66 billion a year ago.