Debt service bill hits P1.3 trillion in 2022

THE NATIONAL Government’s (NG) debt service bill rose to P1.293 trillion in 2022, as amortization payments increased, data from the Bureau of the Treasury (BTr) showed.

BTr data showed the government’s debt payments jumped by 7.4% from the P1.204 trillion posted in 2021.

However, this was slightly below the P1.298-trillion debt service program for the year.

Treasury data showed amortization payments inched up by 2.02% to P790.319 billion in 2022, from P774.637 billion a year ago. It is a tad higher than the P785-billion program for the year.

Amortization payments accounted for 63.8% of the total debt service bill for the year, while the rest went to interest payments.

Broken down, principal payments to domestic lenders rose by 22.8% to P659.834 billion in 2022 from P537.45 billion in 2021.

The government’s payments to external creditors fell by 45% to P130.485 billion from P237.187 billion in 2021.

Meanwhile, interest payments jumped by 17% to P502.858 billion last year from the P429.432 billion in 2021. This was nearly 2% below the P512.59-billion program for the year.

Interest payments on domestic debt went up by 15% to P383.452 billion. This consisted of P12.647 billion in Treasury bills, P231.138 billion in fixed-rate Treasury bonds, and P135.498 billion in retail Treasury bonds.

The Treasury sells government securities weekly to generate funds for the NG’s projects and programs.

Interest paid on external debt rose by 24.3% to P119.406 billion.

DECEMBERIn December alone, the debt service bill surged by 332% to P302.125 billion from P69.989 billion in the same month a year ago.

Data from the Treasury showed amortization payments surged by 506% to P258.52 billion from P42.662 billion in the previous year. Amortization payments accounted for 86% of the total debt service bill during the month.

Principal payments to local lenders soared by 590% to P250.793 billion, while the BTr settled P7.727 billion with foreign creditors, up by 22.6% year on year.

Meanwhile, interest payments in December hit P43.605 billion, up by 59.6% from the P27.327 billion in the same month in 2021.

Interest paid on domestic debt went up by 49.9% to P36.251 billion year on year.

Broken down, the government paid interest for P763 million in Treasury bills, P6.613 billion in fixed-rate Treasury bonds, and P27.923 billion in retail Treasury bonds.

On the other hand, interest paid on foreign debt jumped by 133.9% to P7.354 billion in December.

In 2022, NG gross borrowings stood at P2.16 trillion, 16% lower year on year.

The government plans to borrow P2.207 trillion this year to fund a budget deficit capped at 6.1% of gross domestic product (GDP).

The country’s outstanding debt hit a record high of P13.698 trillion at the end of January. As of end-December, the country’s debt-to-GDP ratio stood at 60.9%. — Luisa Maria Jacinta C. Jocson