BTr: Gov’t debt service burden lightened in March
The government’s debt service burden significantly eased in March, after an increase in interest costs was offset by a decline in principal payments.
The Marcos administration paid a total of P183 billion to creditors at home and abroad in March, 66-percent lower compared to the amount it settled a year ago, according to the latest cash operations report of the Bureau of the Treasury (BTr).
That brought total debt payments in the first quarter to P342 billion, lower by 65 percent. The amount accounted for 17 percent of the P2.1 trillion that the state was planning to spend this year to pay the money it owed to lenders.
Broken down, amortization stood at P95 billion in March, plummeting by 79 percent. That sent the three-month principal payments falling by 87 percent to P101 billion, figures showed.
The BTr said the government only paid P138 million in amortization to local creditors, significantly smaller than the P456 billion it settled a year ago. Since the beginning of the year, the state only spent P576 million in amortization payments for domestic debts, significantly lower than the P699.7 billion it settled previously.
Meanwhile, foreign creditors received P95 billion in amortizations from the government, 14 times bigger than the amount that was paid to them before. This sent the year-to-date foreign principal payments to P100 billion, up by 8 percent.
Interest costs
But total interest expense grew by 24 percent to P88 billion in March, putting the first quarter tally to P241 billion, which marked a 25-percent increase.
The BTr said state spending on domestic interest payments jumped by 15 percent to P64 billion. In the first three months, interest expense for local debts grew by 29 percent to P179 billion.
The government also paid P24 billion in interest to foreign creditors in March, surging by 57 percent. This put the year-to-date external interest bill to P62 billion—representing a 15-percent growth.
The government was targeting a lower budget deficit of P1.537 trillion for 2025, or around 5.3 percent of gross domestic product.
To bridge the fiscal gap, the government would borrow P2.55 trillion from creditors at home and abroad. This was expected to push the state’s total outstanding debt to P17.35 trillion by the end of the year.
