Bigger principal payments bloat 10-mo debt service tab

Payments made by the government for its outstanding debts hit P1.48 trillion in the first 10 months of the year, larger compared to a year ago on the back of bigger principal payments made mostly for local borrowings that had fallen due.

The state’s debt servicing bill from January to October increased by 59 percent compared to last year’s P929.66 billion, latest data from the Bureau of the Treasury showed.

In October alone, debt payments amounted to P77.76 billion, smaller than September’s P239 billion but nearly double the P39.82 billion recorded a year ago.

Figures showed 83.5 percent of debt payments so far this year went to settling local borrowings, while the remaining 16.5 percent were paid to foreign creditors.

Dissecting the Treasury data, principal payments, which cornered 67.1 percent of the total debt service bill, amounted to P940.19 billion as of end-October, almost twice the P496.50 billion in amortization settlements last year.

Of the total amortization payments, P853.94 billion went to lenders onshore while foreign creditors received P105.02 billion.

Meanwhile, interest costs ballooned by 6.22 percent year-on-year to P460.12 billion.

Of that amount, local lenders received P356.93 billion in interest payments while a smaller P162.17 billion went to creditors offshore.

Analysts have said this administration could face more expensive borrowings amid rising interest rates. INQ