Alongside rising borrowings mainly through short-dated securities issuance locally, the national government paid P521.5 billion in debt in the first quarter of the year, 53-percent bigger year-on-year.
The latest Bureau of the Treasury data showed that the amount of debt paid from January to March jumped from P339.9 billion a year ago.
As of end-March, the government settled P395.6 billion in principal payment, up from P220.1 billion last year. Of the total, domestic debt accounted for P252.9 billion while external debt paid reached P142.8 billion.
The government also paid P125.9 billion in interest during the three-month period, up from P119.9 billion a year ago. Of the amount, interest on local borrowings accounted for P90.6 billion while interest on external debt hit P35.2 billion.
P1.7T programmed for 2021
For this year, up to P1.79 trillion had been set aside for debt servicing, of which P1.39 trillion will be for domestic debt and the remaining P402 billion is for foreign obligations.
COVID-19 war chest
The bloated amount for domestic debt payments included repayment for the national government’s short-term borrowings from the Bangko Sentral ng Pilipinas (BSP), an obligation which was payable upon demand.
To recall, the BSP had extended to the government P540 billion in zero-interest loan at the start of the year to beef up the war chest against the prolonged fight against the health and socioeconomic crises inflicted by the COVID-19 pandemic.
The 2021 debt servicing program covers P1.26 trillion in principal amortization plus P531.6 billion in interest payments.
Last year, the national government paid P962.5 billion in debt—P582.1 billion for amortization and P380.4 billion in interest.
The Washington-based Institute of International Finance had warned of debt servicing pressures on emerging markets like the Philippines amid rising borrowings for COVID-19 response but weak, pandemic-battered revenues. INQ