PHL ‘20 debt payments hit a record P962.47B
DEBT payments by the national government reached a new record high last year as it needed to keep up with more financial obligations for its response to the Covid-19 pandemic.
The government shelled out a whopping P962.47 billion in 2020 to repay its debts, 14.25 percent above P842.45 billion in 2019.
This was the biggest full-year debt payment made by the government since the Bureau of the Treasury (BTr) started collecting data in 1986.
However, this is lower than the government’s programmed full-year debt service for 2020 at P1.005 trillion.
Original BTr data as of end-October last year showed debt payments amounted to P1.16 trillion but this declined to P888.69 billion as of end-November after the Bureau of the Treasury revised the data to reflect the repayment of its P300-billion short-term borrowing from the Bangko Sentral ng Pilipinas.
Nonetheless, amortization also outpaced interest payments last year.
Amortization payments as of end-December spiked by 20.9 percent year-on-year to P582.05 billion from P481.58 billion in 2019.
On the other hand, interest payments rose by 5.4 percent to P380.4 billion compared to P360.87 billion in the previous year.
Domestic amortization jumped by 27.85 percent year-on-year to P440.4 billion while foreign amortization inched up by 3.3 percent to P141.65 billion.
Domestic amortization reflected actual principal repayments to local creditors including those serviced by the Bond Sinking Fund and Central Bank Board of Liquidators. Meanwhile, foreign amortization included prepayments made due to bond exchange transactions.
Bulk or 73 percent of total interest payments made by the government last year was used to settle domestic obligations at P279 billion. The remaining P101.36 billion was spent for interest payments for foreign obligations.
For December alone, the government spent a total of P73.78 billion for debt service, almost double compared to P37.19 billion in the same month in 2019.
Government’s interest payments in December last year also slid by 13 percent to P25.3 billion from P29.12 billion in the same period in the previous year.
However, amortization payment for the same month rose six-fold to P48.44 billion from only P8 billion in December 2019.
Since the government needed to borrow more to fund its fight against Covid-19, the national government’s outstanding debt by end of 2020 already hit P9.795 trillion, the highest so far on an annual basis since 1986. The government also posted a 14-year-high debt-to-GDP ratio of 54.5 percent last year.
This came a year after the country achieved its historic low debt-to-GDP ratio of 39.6 percent as it ended 2019 with P7.73 trillion in outstanding debt.