Interest payments down 5%

The government shelled out P279 billion for interest payments in 2011, lower by P15.2 billion, or 5.2 percent, than the P294.2 billion in 2010.

This was attributed to less borrowings, lower interest rates and a stronger peso during the period.

Budget Secretary Florencio B. Abad said the amount not spent on interest payments on interest accounted for 27.7 percent of the spending shortfall in 2011 of P153.6 billion.

The government spent only P1.558 trillion instead of the programmed expenditure of P1.71 trillion for 2011.

“These were (due to) the lower-than-expected borrowing requirements of the government, interest rates and foreign exchange rates, alongside the liability management strategies that were implemented,” Abad said.

This does not completely represent good news since the pace of government spending was dampened by efforts to improve the quality of spending, he said.

“(This is particularly true in relation to) infrastructure, where the government undertook a painstaking yet necessary review and reform of cost assumptions, quality standards and procurement processes,” he said.

“With the reforms we introduced not only last year but also in the very design and implementation of the 2012 national budget, we are confident that we will sustain the momentum and the quality and impact of public spending this year,” he added.

According to the Bureau of the Treasury, the government’s debt stock rose to P4.932 trillion as of November 2011, up by P34 billion, or 0.7 percent, from the October level.

With the latest population estimate of 95.6 million, the amount of total outstanding debt means that each citizen has a share of P51,594.

Data on total outstanding debt showed that 58 percent, or P2.85 trillion, was borrowed from domestic lenders, while 42 percent, or P2.082 trillion, was booked in foreign currencies such as the US dollar, the euro and yen.