Gov’t debt payment down 15.5% to P19.8B

The amount of debt paid by the government in October dropped by 15.5 percent year-on-year to P19.8 billion mainly as amortization payments fell by almost half, the latest Treasury data showed.

The government settled a total of P23.4 billion in combined amortization (principal) and interest in October last year.

In October this year, the government paid P3.7 billion in amortization, down 45.2 percent from P6.7 billion last year.

Amortization payments for domestic debt amounted P753 million; for foreign liabilities, P2.9 billion.

Interest payments at the start of the fourth quarter, meanwhile, slid by 3.7 percent to P16.1 billion from P16.8 billion a year ago.

The interest paid for domestic liabilities hit P9.4 billion, while that for foreign liabilities was P6.7 billion.

For the first 10 months of the year, debt payments reached P479.3 billion, up 5.9 percent from P452.7 billion a year ago.

End-October amortization payments reached P207.5 billion while interest paid in the same period amounted to P271.9 billion.

For next year, the government plans to allocate P419.3 billion or 14 percent of the proposed P3.002-trillion 2016 national budget for debt servicing. The outstanding government debt as a percentage of the gross domestic product or GDP is expected to decline further to 41.8 percent next year.

Last year, the government serviced P515 billion worth of debt, the lowest in more than a decade, on the back of record-low amortization payments.