The national government’s debt payments increased by half in May this year as both interest expense and amortization jumped by double-digits, data from the Bureau of the Treasury showed.

Debt servicing of the Duterte administration accelerated by 53 percent during the month to P37.8 billion from P24.64 billion in May last year.

Bulk of the debt payments went to interest amounting to P28.9 billion, higher by 57 percent compared with P18.35 billion a year earlier.

Of the total interest payments, domestic lenders cornered P24.11 billion, while the remaining P4.82 billion went to foreign creditors.

Both domestic and foreign interest expenses in May increased by 61 percent and 24 percent, respectively.

Meanwhile, amortization payments hit P8.87 billion that month, an increase of 41 percent from P6.29 billion in May 2020. 

Broken down, principal payments to foreign banks went up 28 percent year-on-year to P8.07 billion from P6.29 billion, while domestic lenders were paid P793 million from zero settlement in the previous year.

In the first five-months of the year, debt payments of the national government grew 21 percent to P623.59 billion from P512.96 billion in the same period last year.

Interest payments at end-May reached P178.61 billion, down 49 percent compared with P352.84 billion last year, while amortization expenses jumped 178 percent from P160.11 billion to P444.98 billion.

Last week, the treasury reported that the Philippines breached the P11 trillion debt level in May as loans made by the national government amid the pandemic continued to grow.

Of the total amount outstanding, about 28 percent is owed to foreign creditors. 

Despite the increase, Finance Secretary Carlos G. Dominguez III assured that the government has ample reserves and strong fiscal position to pay all of its borrowings over the long term.

Gross borrowings in the first five-month of 2021 totaled P1.713 trillion, higher by 13 percent compared with P1.509 trillion in the same period in 2020.

Domestic financing totaled P1.459 trillion at end-May 2021, while foreign borrowings reached P253 billion.

Source: Manila Bulletin (