Finance Secretary Ralph Recto | PHOTO: Bibo Nueva Espaٌa/Senate PRIB
Payments made by the government for its debts more than tripled year-on-year in January to P158.9 billion on the back of sharp increases in both principal and interest settlements, latest data from the Bureau of the Treasury (BTr) showed.
The Marcos administration’s debt service bill went up by 232.2 percent in the first month of 2024 compared with a year ago, when payments for liabilities amounted to P47.8 billion.On a month-on-month basis, debt payments went up by 130.6 percent.
Dissecting the Treasury’s data, the government settled P49 billion in local borrowings, and P109.9 billion in external obligations in January.
Figures showed total interest payments fattened by 58 percent year-on-year to P74.2 billion, after interest costs of domestic debts nearly doubled to P48.8 billion.
Meanwhile, the state made P84.7 billion in total amortization payments in January, significantly up from just P861 million a year ago.
Analysts have said the government could face more expensive borrowings amid a high interest rate environment.
The Marcos administration plans to borrow a total of P2.46 trillion from creditors at home and abroad in 2024 to help bridge its budget deficit, which is projected to hit P1.4 trillion this year.
Finance Secretary Ralph Recto said the government would remain “prudent” in its debt management by continuing to adopt a 75:25 borrowing mix in favor of domestic sources. That means that the borrowing program this year will be composed of local debts worth P1.85 trillion and foreign financing amounting to P606.85 billion.
Such a strategy, Recto explained, would “mitigate foreign exchange risks, take advantage of the abundant liquidity in the country’s financial system, and support the development of the local debt and capital markets.”
To diversify the state’s funding sources, Recto said the BTr was looking at various global bond markets, with a “potential curtain-raiser offering” in the first semester of the year. IN