Gov’t debt service bill rose 26% in 2024

A worker shows Philippine peso bills inside a money changer in Metro Manila, Philippines. The Philippines’ debt service bill surged by 26 percent in 2024. —File photo by Dondi Tawatao | Reuters

MANILA, Philippines — The Marcos administration’s debt service bill surged by 26 percent in 2024 on the back of higher interest and amortization payments, but the total amount settled nevertheless stayed within the limit set by the government.

The government had spent a total of P2.02 trillion to pay for its obligations last year, higher than the 2023 level of P1.6 trillion, according to the latest cash operations report of the Bureau of the Treasury (BTr).

But despite the heavier debt servicing burden, the amount that the government paid to creditors was still within the P2.03-trillion ceiling set by the Marcos administration for last year.

Dissecting the BTr’s report, the government had disbursed P1.26 trillion on amortizations last year, up by 29 percent.

Data showed principal repayments to local creditors had gone up by 16 percent to P1 trillion while P239.3 billion was spent on amortization for external liabilities, soaring by 98 percent.

Higher interest costs

Interest expenses fattened by 21 percent to P763.3 billion last year. Of that amount, P539.8 billion went to domestic creditors, up by 24 percent, while interest spending on foreign borrowings had grown by 16 percent to P223.5 billion.

Overall, the government’s total debt servicing bill of P2.02 trillion cornered 34 percent of the state’s overall expenditures in 2024, which amounted to P5.93 trillion. That represents money that could have been on more productive undertakings that can spur economic growth like social programs and projects.

Bigger program

For this year, the Marcos administration has set a debt repayment program of P2.05 trillion, or 33 percent of the state’s overall spending target of P6.16 trillion. Broken down, P1.2 trillion will go to principal amortization in 2025 while P848 billion will be used to settle borrowing costs.

To bridge a projected budget deficit of P1.537 trillion, or around 5.3 percent of gross domestic product, the government is planning to borrow P2.55 trillion from creditors at home and abroad this year.

That is expected to push the state’s outstanding debt to P17.35 trillion by the end of 2025.