DEBT payments by the national government were down 64.94 percent as of end-February from a year earlier, with the decline traced to lower amortization during the period, the Bureau of the Treasury (BTr) reported.
Data posted on the BTr website on Sunday showed debt payments in the first two months of 2025 stood at P158.664 billion, compared with P452.513 billion in January to February 2024.
Amortization dropped 98.25 percent to P5.784 billion from P330.465 billion in the comparable year-earlier period.
BTr data also showed interest payments in January to February totaled P152.88 billion, up 25.26 percent from P122.048 billion.
A similar trend was seen in February alone, as government debt payments decelerated by 82.24 percent year-on-year to P52.154 billion in February 2025 from the P293.615 billion paid out in the same month last year.
Amortization slid by 98.49 percent to P3.709 billion from the year-earlier level of P245.788 billion.
Interest payments in February inched up 1.29 percent to P48.445 billion from P47.827 billion.
The BTr said the increase in interest payments in February was due to higher coupon payments on domestic securities.
“This was offset by lower foreign payments, reflecting the base effect of a timing adjustment in payments made in 2024,” the BTr said.
John Paolo Rivera, a senior research fellow at the Philippine Institute for Development Studies, in his comment, said: “If this trend continues — interest costs rising while amortization is delayed — it could raise medium-term fiscal sustainability concerns. Rollover risk might increase, and more of the budget would be tied up in interest payments rather than development spending.”
He said the 25 percent increase in interest payments could suggest that the cost of servicing debt is rising possibly due to higher global interest rates and more external borrowing.”
Michael Ricafort, Rizal Commercial Borrowing Corp. chief economist, said higher interest payments may also be attributed to the net increase in borrowing costs over the last three years, given the large accumulation of outstanding debt especially since the COVID-19 pandemic.
“The net decrease in Fed rates and BSP rates by -1.00 since late last year somewhat mitigated the increase in interest payments,” Ricafort said.
“Further cuts in Fed rates that could be matched locally could also help temper the increase in interest payments if there would be additional or new borrowings, especially those that finance the upcoming national government budget deficit in the coming months,” he added.
