FOR the first half of the year, the national government’s debt payments hit P773.79 billion, up by 41.4 percent in the same period last year.
As amortization continues to outpace interest payments, the government’s debt service bill from January to June this year spiked from last year’s P547.35 billion.
The bulk of the debt payments went to amortization and the rest, to interest.
Amortization payments jumped by 57.16 percent to P565.26 billion from P359.67 billion in the same period a year ago.
On the other hand, interest payments from January to June this year also climbed to P208.53 billion, up by 11.1 percent from last year’s P187.68 billion.
Amortization refers to the repayment of loan principal over time, while interest payment refers to a payment determined by the interest rate of an account.
Under domestic amortization, redemptions accounted for P405.23 billion, mainly comprising payments made to the government’s Bond Sinking Fund at P352.12 billion, and domestic bond exchange at P51.54 billion.
Amortization payments for assumed liabilities stood at P793 million while P780 million went to agrarian reform beneficiaries.
Foreign amortization
Meanwhile, foreign amortization reached P160.02 billion.
Under domestic interest payments, most of the amount was spent for fixed-rate Treasury Bonds at P93.93 billion. The interest paid for Retail Treasury Bonds amounted to P51.17 billion.
Foreign entities were also paid P49.2 billion in interest during the period.
For June alone, the government’s debt service bill reached P150.2 billion, more than four times the total in the same month last year at P34.39 billion.
Amortization payments in June this year also skyrocketed to P120.27 billion, nearly an 18-fold rise from last year’s P6.83 billion.
Likewise, interest payments in the same month soared to P29.93 billion, inching up by 8.58 percent from P27.56 billion.
This year, the government has programmed P1.79 trillion for its debt service, with P1.26 trillion allotted for principal amortization and P531.55 billion in interest payments.
In 2020, the government spent P962.47 billion to service its debts as it needed to keep up with more financial obligations to fund its war chest against the Covid-19 pandemic.
The outstanding debt of the national government has already piled up to P11.166 trillion as of end-June this year, swelling by 23.3 percent from P9.054 trillion a year ago.