Gov’t debt payment down 2% in 1st 10 months

The government spent P619.9 billion in 10 months to October to pay off its debts. That amount was about 2 percent lower from the P633.4

billion reported in the same period last year, according to the Bureau of the Treasury.

The figure that went to debt servicing came in lower year on year as the government continued to enjoy savings on interest payments while growth on principal payments slowed down.

From January to October, the government settled principal loans amounting to P384.8 billion, including P280.8 billion in domestic debts and P103.9 billion in foreign borrowings.

Total principal payment in the first 10 months was 3 percent higher than the P374.9 billion reported a year ago.

Also, the government paid a total of P235.1 billion in interest—P136.4 billion in domestic debts and P98.8 billion in foreign borrowings.

Total interest payment for the period was 9 percent lower than the P258.5 billion recorded in the same period of 2010.

In October alone, the government paid a total of P22.4 billion, including P12.2 billion for domestic loans and P10.2 billion in foreign obligations.

The month’s total was 14 percent lower than the P26.1 billion spent in the same month last year.

Budget Secretary Florencio B. Abad said in a statement that the decrease in interest payments from January to October was due to lower borrowing costs and lower interest rates.

“Interest payments accounted for 19.7 percent of disbursements [which totaled P1.2 trillion for the period], compared to 20.5 percent last year,” Abad said.

Earlier this year, the budget chief said the government wanted to lower its fund for debt payments to P367 billion in 2012—1.3 percent lower than the planned P372 billion this year.

Abad said that considering the national budget, funds earmarked for debt servicing would decrease to 20.2 percent from the 22.6 percent

provided for in the 2011 budget.

Malacañang had proposed a P1.816-trillion budget for next year, which the two chambers of Congress jointly approved last week.

Abad said that the early approval of the budget bill and its prompt

enrollment in Malacañang would allow President Aquino to sign the General Appropriations Act of 2012 by the middle of this month.