MANILA, Philippines—The government settled debts amounting to P729.8 billion in 2012—up by just one percent from the P722.8 billion it paid the previous year, according to the Bureau of the Treasury.
The amounts spent in 2011 and 2012 to service debts were almost the same as amortization declined while growth in interest payments accelerated by a double-digit pace.
Last year, the government settled a total of P417 billion in principal, including P330.4 billion in domestic debt and P86.6 billion in foreign loans.
Total principal payment in 2012 was 6 percent lower than the P443.8 billion posted the previous year.
Also, the government paid a total of P312.8 billion in interest, covering P201.2 billion in domestic debt and P111.6 billion in foreign borrowings.
Total interest payment for the period was 12 percent higher than the P279 billion recorded in 2011.
Last week, Finance Secretary Cesar V. Purisima said the government would continue efforts to extend the maturity of its debt.
So far, maturity of all foreign debt exceeds 10 years while that for local obligations is “mostly over 10 years.”
Purisima said the government would try to insulate itself from changes outside its control, such as the adverse economic developments abroad that affect the domestic economy.
“Eventuality we will make the job of the central bank easier as opposed to now when it has to use everything in its toolkit to make sure we have stability in our exchange rate,” the finance chief said.
He was reacting to a question about possible bubbles forming due to the domestic economy’s strong performance.
In December alone, the government paid a total of P71.8 billion in financial obligations, including P29.4 billion for domestic debt and P42.4 billion in foreign loans.
The month’s total was 3 percent higher than the P69.4 billion paid out in the same month of 2011.
As for principal payments, the Treasury shelled out P41.3 billion in December, lower by 2 percent than the previous P42 billion.
Interest payments for the month reached P30.5 billion, or 11 percent more than the P27.5 billion settled in the same month the previous year.