Economy



PHL debt-service payments down over 56% in Jan.


Date issued: April 17, 2017


FUNDS allocated to service debt in January dropped by more than half year on year, according to the Bureau of the Treasury (BTr).


The national government spent P70 billion for debt service during the year, falling 56.5% from a year earlier.

Month on month, the January total was sharply higher than the P24.922 billion paid out in December.

Principal payments settled in January -- which covers about 40% of total debt service -- amounted to P27.653 billion, against P115.365 billion a year earlier.

The government made almost all of its amortization payments to foreign lenders at P27.589 billion. Only P64 million was settled with local creditors.

January interest payments on the other hand slid 7.1% year on year to P42.353 billion.

Treasury bonds (T-bonds) took up the largest share of domestic interest payments at P16.812 billion, followed by P4.331 billion from Retail Treasury Bonds, while only P173 million were accounted for by Treasury bills (T-bills).

For this year, the government has set aside P647.28 billion for debt service, or about 19% of the P3.35 trillion 2017 budget, according to the 2017 Budget of Expenditures and Sources of Financing (BESF).

The January debt payments represent 10.8% of the programmed debt service for the full year.

About 48% or P312.403 billion is programmed for principal payments while the remaining P334.876 billion will go to interest payments.

Budget Secretary Benjamin E. Diokno said earlier that the country will work to reduce the debt burden to 35%-37% of gross domestic product from 2015’s 44.7%.

The government will maintain an 80-20% financing mix in favor of domestic sources until 2022. -- Elijah Joseph C. Tubayan


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