November 25, 2017 | MANILA, PHILIPPINES

Debt service payments rise over 207% in May

PAYMENTS to service government debt rose 207.51% year on year in May, driven by an increase in principal settlements on domestic obligations, the Treasury bureau said.

The national government in May made payments of P78.38 billion, against P25.49 billion a year earlier.

Month on month, the debt service bill rose against the P26.29 billion worth of payments made in April.

The surge was driven by principal payments worth P57.42 billion, well over the P6.83 billion recorded in the same month in 2016.

Principal repaid to domestic lenders grew to P50.9 billion, compared to P190 million a year earlier.

Principal repaid to external creditors meanwhile totaled P6.52 billion, little changed from the P6.64 billion in the same period of 2016.

Interest payments totaled P20.96 billion in May, up 12.33% from a year earlier.

Of the total, P18.75 billion went to domestic lenders -- of which P16.46 billion went to interest payments on fixed-rate Treasury bonds, P1.88 billion for retail Treasury bonds, and P378 million for Treasury bills.

Foreign interest payments meanwhile totaled P2.22 billion.

Domestic payments for both principal and interest took up 88.85%, or P69.65 billion, of the debt service bill that month while foreign lenders were paid P8.74 billion.

The total debt service bill for the five months to May was P353.32 billion, down 27.09% from a year earlier.

The government borrows from both local and external sources to finance its intended budget deficit of 3% of gross domestic product, or about P482.1 billion. -- E.J.C. Tubayan