THE NATIONAL Government’s (NG) debt service bill surged year on year in November as both interest and amortization payments rose, data from the Bureau of the Treasury (BTr) showed.

The NG’s debt service bill soared by 65.3% to P93.704 billion in November from P56.674 billion in the same month a year ago.

Month on month, debt servicing fell by 56.8% from P216.85 billion in October.

The debt service refers to payments made by the National Government on its domestic and foreign debt.

Interest payments accounted for the bulk or 71% of debt payments in November.

Data from the BTr showed interest payments jumped by 37.3% to P66.653 billion in November from P48.548 billion in the previous year.

Interest paid on local debt spiked by 38.8% to P48.929 billion in November from P35.257 billion in the same month in 2023.

Domestic interest payments were composed of P29.512 billion in fixed-rate Treasury bonds, P16.872 billion in retail Treasury bonds and P2.017 billion in Treasury bills (T-bills).

Interest paid to foreign creditors rose by 33.4% year on year to P17.724 billion in November from P13.291 billion.

Treasury data showed amortization payments more than tripled (232.9%) to P27.051 billion in November from P8.126 billion in the same month last year.

Principal payments on domestic debt skyrocketed to P18.297 billion from P96 million in the year prior.

On the other hand, principal payments on external debt increased by 9% to P8.754 billion from P8.03 billion in 2023.

11-MONTH DEBT SERVICE
In the January-November period, the NG debt service bill jumped by 27.3% to P1.95 trillion from P1.53 trillion in the same period last year.

Amortization payments climbed by 29.2% to P1.25 trillion as of end-November from P967.09 billion a year ago. It accounted for 63.9% of the overall debt service bill.

Broken down, principal payments on domestic debt stood at P1.02 trillion, while external payments were recorded at P230.973 billion.

Meanwhile, interest payments rose by 24.3% to P705.334 billion in the 11-month period from P567.655 billion a year ago.

Interest payments on domestic debt amounted to P502.389 billion, while those on external debt stood at P202.945 billion.

“The sharp year-on-year increase in the NG’s debt servicing bill could be attributed to higher debt maturities,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

He also cited relatively elevated interest rates and a weaker peso that drove up foreign debt payments.

The peso closed at P58.62 against the greenback at the end of November, depreciating by 52 centavos from its P58.1 finish as of end-October.

The local unit also fell to the record low P59-a-dollar level twice during the month, on Nov. 21 and 26.

“This also reflected the wider NG budget deficit for the period that required more NG borrowings, especially some short-term borrowings such as Treasury bills,” he added.

Separate BTr data showed the budget gap more than doubled to P213 billion in November from P93.3 billion a year ago.

This brought the 11-month fiscal deficit to P1.18 trillion, wider than the P1.11-billion shortfall last year. It also represented 79.29% of the P1.5-trillion deficit ceiling for 2024.

“NG debt increased sharply since the COVID-19 (coronavirus disease 2019) pandemic since 2020 and some of which already started to mature, thereby leading to higher debt servicing costs,” Mr. Ricafort added.

Latest data from the BTr showed the NG’s outstanding debt rose to a fresh high of P16.09 trillion as of end-November.

The debt stock is expected to have reached P16.06 trillion at the end of 2024 and to P17.35 trillion for this year. — Luisa Maria Jacinta C. Jocson