Heavier amortizations bloat state debt service bill
The debt service burden of the Marcos administration got heavier in April after the government spent more on settling amortizations, which offset the decline in interest costs.
The state paid P280.9 billion to its creditors, 74-percent bigger than the amount it settled compared with 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 four months to P622.9 billion. It was 45-percent smaller year-on-year and accounted for 30 percent of the Marcos government’s plan to spend P2.1 trillion on debt servicing this year.
Broken down, the government paid P234.5 billion in amortizations in April, 2.4 times bigger than a year ago. This sent year-to-date principal payments to P335.5 billion, down by 62 percent.
The BTr said the state paid P169.8 billion in amortizations it owed to local creditors. It was three times bigger year-on-year, bringing the four-month principal payments to P170.4 billion. The tally, however, was 77 percent lower on an annual basis.
Foreign lenders received P64.6 billion in principal payments from the government in April, marking a 65-percent growth. Since the beginning of the year, the BTr paid P165 billion in amortizations to creditors offshore, surging by 25 percent.
Lower interest costs
Those increases, in turn, offset the 31-percent slump in interest expenses to P46.4 billion.
The Treasury said it settled P287 billion in interest costs in the first four months. This meant a 10-percent increase compared with a year ago.
Domestic creditors accepted P30.4 billion in interest payments from the state, which was 34-percent smaller than the amount they received last year. This put the January-April sum at P209 billion, up by 13 percent.
Interest burden on foreign borrowings slipped by 24 percent to P15 billion, sending the year-to-date tally to P78.4 billion. The cumulative amount was 4-percent bigger than the previous year.
The government was targeting a lower budget deficit of P1.537 trillion for 2025, or around 5.3 percent of gross domestic product.
