Gov’t debt payment up 7% in Jan.

The government spent P134.7 billion in January to pay its debts, according to the Bureau of the Treasury.

This was 7 percent higher than the P125.8 billion paid in the same month last year.

In January, the government settled P84.4 billion in principal obligation, including P82.9 billion in domestic debts and P1.5 billion in foreign loans.

The total principal payment for the month was 6 percent lower than the P90 billion posted a year ago.

Also, the government paid P50.3 billion in interest, covering P28.6 billion on domestic debts and P21.7 billion in foreign borrowings.

Total interest payment for the period was 40 percent higher than the P35.8 billion posted a year ago.

In March, Budget Secretary Florencio B. Abad said that overall state spending in January increased by 16.2 percent in view of the spike in interest payments.

Abad said interest payments increased due to higher outstanding treasury bonds as of December 2011, compared to year-ago level, for which interest expense payments were due in January 2012.

He said that in 2011, the government had been spending less on interest payments owing to successes in managing debts.

As of end-December 2011, the government’s debt stock rose by P18.8 billion to P4.951 trillion from the November level largely due to a net issuance of domestic securities.

The debt stock was 50.9 percent of the economy, valued at P9.934 trillion last year. This was the lowest ratio in 13 years or since 1998 when it hit 48.1 percent.