THE NATIONAL GOVERNMENT paid P64.288 billion in debt in April, 57% lower year on year as principal payments dropped, the Bureau of the Treasury (BTr) said.
However, debt repayments in the first four months of the year jumped 20% from year ago levels.
Data from the BTr showed the April debt service bill fell by 57% from P148.34 billion in April 2020 and by 76% from P268.41 billion in March 2021.
The bulk or 63% of the total went to principal payments, and the rest went to interest payments.
The government settled P40.469 billion in principal payments in April, down 68% from P126.46 billion a year ago.
Of the total, P38.165 billion went to repaying local debts, 69% lower than the P121.485 billion paid the year before. External payments slid 54% to P2.304 billion from a year ago’s P4.975 billion.
Meanwhile, the government paid P23.82 billion in interest in April, up by 8.9% from P21.88 billion a year ago.
Of the amount, interest on local borrowings rose 17% to P17.5 billion, while interest on foreign obligations slipped 8.6% to P6.32 billion.
Despite lower debt service bill in April, the government paid P585.793 billion in debt in the four-month period, up 20% from P488.318 billion in the year prior.
Principal payments, which accounted for 74% of the total debt service bill, rose 25.8% to P436.12 billion in the January to April period.
The government paid P149.68 billion in interest, up 5.6% from P141.76 billion a year ago.
The government borrows from both local and foreign lenders to plug the funding gap.
From January to April, the government borrowed P1.65 trillion so far, up 36% from P1.219 trillion in the same period last year.
The Philippines’ debt service bill is expected to soar after it increased its borrowings to fund its pandemic response since last year.
For the global debt watcher S&P Global Ratings, the Philippines will likely remain resilient despite rising interest expenses over the short term.
In a May 24 note, S&P said the country is among the emerging countries capable of fulfilling nearly all their funding needs through local debt markets.
The government prefers to borrow locally to lessen external risks from currency fluctuations and uncertainties over global developments.
For this year, it plans to source 85% of its new borrowings from domestic lenders. — B.M.Laforga