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NG’s H1 debt payments down 40.8% to P458.36B

THE national government spent P458.36 billion to repay its debts during the first half of this year, way less than the amount it shelled out a year ago.

Latest data from the Bureau of the Treasury showed government’s debt payments from January to June plunged by 40.8 percent this year from P773.7 billion in the same period last year.

Almost half of the total debt payments in the first semester this year were used for amortization costs, which hit P201.1 billion, a 64.4-percent drop from P565.2 billion a year ago.

On the other hand, interest payments in the first six months of this year rose by 23.3 percent to P257.2 billion from P208.5 billion.

For June alone, the national government’s debt payments crashed by 70.5 percent to P44.29 billion this year from P150.2 billion a year ago.

Meanwhile, amortization payments in June this year settled at only P7.53 billion, a 97.3-percent drop from P120.27 billion in the same month in 2021.

However, interest payments in June this year rose by 22.8 percent to P36.75 billion from P29.93 billion a year ago.

For 2022, the government has programmed debt payments to reach P1.298 trillion.

If this is realized, this would be higher than the P1.204 trillion that the government shelled out in 2021 to repay its debts as the Covid-19 pandemic raged on.

Former President Duterte ended his term with the national government’s debt stock soaring to another record-high of P12.79 trillion as of end-June this year.

This was more than double than the P5.948 trillion debt level when Duterte assumed office in mid-2016. By the end of 2019 or a few months before the Covid-19 pandemic hit the country, the national government’s debt stock was at P7.73 trillion.

The country’s debt-to-gross domestic product (GDP) slightly eased to 62.1 percent in the second quarter of the year from 63.5 percent in the first quarter, but remained above the internationally-recommended 60-percent threshold for a healthy economy.

Last month, Finance Secretary Benjamin E. Diokno said they expect the country’s debt-to-GDP ratio to reach 61.8 percent by the end of the year before tapering off until it reaches 52.5 percent in 2028, the end of the term of President Ferdinand “Bongbong” Marcos, Jr.

Diokno also sees no need for the government to borrow as much as it did during the crisis years.

While Diokno said they are not in a hurry to quickly return to the country’s historic low prepandemic debt ratio of 39.6 percent, he said their strategy is to prioritize supporting economic growth in order for the country to outgrow its debt.

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