Gov’t debt payment dipped in 11 months

The government spent P653.4 billion in the 11 months to November to pay its debts, down from the P660.4 billion settled in the same period last year, according to the Bureau of the Treasury.

The amount spent in debt servicing continued to go down as the government enjoyed savings on interest payments.

From January to November, government settled a total of P401.8 billion in principal—P291.6 billion in domestic debts and P110.2 billion in foreign loans.

Total principal payment in the first 11 months was 4 percent higher than the P385.4 billion reported in the same period a year ago.

Also, the government paid P251.6 billion in interest, covering P150.6 billion in domestic debts and P100.9 billion in foreign borrowings.

Total interest payment for the period was 9 percent lower than the P275 billion recorded in the same period of 2010.

In November alone, the government paid a total of P33.5 billion, including P25.1 billion in domestic debts and P8.4 billion in foreign obligations.

The month’s total was 24 percent higher than the P26.9 billion seen in the same month last year.

According to Budget Secretary Florencio B. Abad, the government has been spending less on interest payments due to its success in managing debt.

Abad said last week that interest payments from January to November decreased as a result of the liability management strategy of the Department of Finance.

The strategy also resulted in a lower budget deficit to date. As of end-November, the government spent P96.2 billion on top of the national budget—barely a third of the 2011 budget deficit forecast of P300 billion.

Abad said lower borrowing costs due to the strengthening of the peso and lower interest rates supported the government’s strategy.

The budget chief said the peso averaged at around 43.30 against the US dollar from January to November, stronger than the 45.20 reported during the same period last year.