Debt service bill jumps to PHP 328 billion in Sept.

The national government’s (NG) debt service bill more than tripled in September as the government increased both amortization and interest payments, the Bureau of the Treasury (BTr) said.

The latest data from the Treasury showed that the debt service bill surged by 250% to PHP 327.89 billion in September from PHP 93.61 billion in the same month last year.

Month on month, the debt service bill slides by 50.67% from PHP 664.72 billion in August.

Debt service refers to the payments made by the government on domestic and foreign borrowings.

The bulk, or 75.08% of debt payments, was made up of amortization payments, the BTr data showed.

In September, amortization payments soared by 1,146% to PHP 246.19 billion from PHP 19.76 billion in the same month a year ago.

This was mainly composed of principal payments on domestic debt, which sharply grew to PHP 237.93 billion in September from PHP 87 million in the same month last year.

Amortization paid on foreign debt plunged by 57.99% to PHP 8.26 billion in September from PHP 19.67 billion in 2024.

Meanwhile, interest payments stood at PHP 81.7 billion in September, up by 10.63% from PHP 73.85 billion a year ago.

Domestic interest payments also increased by 17.81% to PHP 65.27 billion in September from PHP 55.41 billion in the same month last year.

Broken down, PHP 42 billion went to fixed-rate Treasury bonds, PHP 19.18 billion to retail Treasury bonds, PHP 4.04 billion to Treasury bills (T-bills) and PHP 48 million to others.

Interest payments for foreign borrowings slipped by 10.92% to PHP 16.43 billion in September from PHP 18.45 billion in the same month in 2024.

“This is largely due to the large Treasury bond maturity worth P288 billion in September 2025 in terms of large principal payments of the NG,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message over the weekend.

Nine-month period

The NG debt service bill stood at PHP 1.87 trillion in the first nine months of the year, up 13.69% from PHP 1.64 trillion in the same period last year.

The nine-month tally already accounted for 90.97% of the PHP 2.05-trillion debt service program this year.

Amortization payments, which made up the bulk of total payments, rose by 13.43% to PHP 1.2 trillion in the January-to-September period from PHP 1.06 trillion. This was 99.73% of the PHP 1.21-trillion full-year amortization program.

Principal payments on domestic debt increased by 14.4% to PHP 1.01 trillion, while payments on external debt rose by 8.7% to PHP 196.48 billion.

Meanwhile, interest payments grew by 14.15% to PHP 665.85 billion as of end-September from PHP 583.29 billion a year ago. This was 78.52% of the PHP 848.03-billion programmed interest payments for 2025.

Interest payments on domestic debt stood at PHP 494.39 billion, 18.24% higher than PHP 418.13 billion in 2024.

This was made up of PHP 334.14 billion in fixed-rate Treasury bonds, PHP 118.89 billion in retail Treasury bonds, PHP 34.4 billion in T-bills and others (PHP 6.96 billion).

On the other hand, interest payments on external debt rose by 3.81% to PHP 171.46 billion as of end-September from PHP 165.17 billion in the same period a year ago.

In the coming months, Mr. Ricafort said no large Treasury bonds will mature in the fourth quarter, which will likely temper the debt servicing bill.

“Large Treasury bond maturity of at least PHP 200 billion each are scheduled in February 2026 and April 2026,” he said.

The US Federal Reserve and Bangko Sentral ng Pilipinas’ cumulative rate cuts since the later part of 2024 may have helped to trim NG’s interest payments, he said.

However, this may be offset by the peso weakness against the US dollar, which could lead to higher servicing of foreign debt, Mr. Ricafort said.

The peso plunged to a record low of PHP 59.13 per dollar on Oct. 28.

The NG debt stock fell to PHP 17.46 trillion as of end-September but still remained above its projected PHP 17.36-trillion ceiling by end-2025. — Aubrey Rose A. Inosante