The national government’s (NG) debt service in 2022 will remain manageable despite the slight increase in overall debt for the said fiscal year.
National Treasurer Rosalia De Leon said domestic borrowings in 2022 will be funded by the Bond Sinking Fund while repayments for external and other obligations will be sourced from the NG’s borrowings.
“Domestic amortization will be funded by the Bond Sinking Fund. External and interest payments (IP) will be from our borrowings,” De Leon told the Daily Tribune in a Viber message.
Still, the Treasury chief said they will continue to monitor market developments in deciding the volume of their issuances for the fiscal year 2022.
Data from the Department of Budget and Management’s (DBM) website showed total IP in 2022 amounted to P512.58 billion, lower than the recorded P531.55 billion in 2021.
On the other hand, principal amortization, which includes those serviced by the Bond Sinking Fund, stood at P785.20 billion, higher than the P758.32 billion in the same comparable period.
Bulk or P1.04 trillion of the total obligations were domestic debt while foreign loans accounted for the remaining P253.81 billion of the overall NG debt service for the year.
Finance Undersecretary Mark Dennis Joven earlier said they will prioritize official development assistance or ODA type of loans in 2022 over commercial borrowings.
Doing this tactic will “minimize overall financing cost” and lengthen the maturity of the state’s overall loan portfolio, Joven said.
According to him, factors to be considered in their decision making include the overall financing costs, swap rate as well as the loan’s tenor.