Debt service payments down 1.1% to P385B
The government spent P385 billion in the first five months of 2011 to service its debts, lower by 1.1 percent than the P389.2 billion paid out in the same period last year, according to the Bureau of the Treasury.
The decrease was observed given Malacañang’s continuing efforts to ease the level of debt in relation to gross domestic product, which at end-2010 was pegged at 55.4 percent.
From January to May, the government settled a total of P267.2 billion in principal, including P188.2 billion in domestic debts and P78.5 billion in foreign loans.
Total principal payment in those five months was 5.7 percent higher than the P252.9 billion posted in the year-ago period.
The government also paid a total of P117.8 billion in interest, covering P68.9 billion on domestic debts and P48.9 billion on foreign borrowings.
Total interest payment for the five months was 13.6 percent lower than the P136.4 billion recorded in the same period of 2010.
Latest documents from the Treasury showed that the stock of outstanding debts inched up to P4.71 trillion as of end-March, increasing by about P51 billion from the February level mainly due to new loans.
With the population estimated to have reached 94.01 million in 2010, the amount of total outstanding debt would mean that each citizen has a share of P50,533.
Based on the Aquino administration’s proposed medium-term debt path, the debt-to-GDP ratio would remain at 55 percent in 2012, but would steadily go down in the succeeding years toward 47 percent in 2016.
Such ratio has hovered within the range of 56 to 58 percent in the past three years, much higher than the average for Southeast Asian neighbors of about 33 percent.
Malacañang also wanted to lower its fund for debt payments to P367 billion in 2012, or 1.3 percent lower than the planned P372 billion this year to sustain efforts in consolidating its finances mainly by lengthening the average maturity of obligations.
Budget Secretary Florencio B. Abad said that compared with the total national budget, debt servicing funds would decrease to 20.2 percent based on Malacañang’s proposed allocations for 2012 from 22.6 percent of the 2011 budget.
President Aquino has approved a proposal for a P1.816-trillion budget next year, which is 10.4 percent more than this year’s P1.645 trillion.
