Government’s debt service bill surges to PHP 665B in August

The national government’s (NG) debt service bill soared in August as amortization and interest payments surged, the Bureau of the Treasury (BTr) reported.

The latest data from the Treasury showed that the debt service bill more than tripled (256.96%) to PHP 664.72 billion in August from PHP 186.22 billion in the same month last year.

Month on month, the debt service bill also went up by 515.17% from PHP 108.06 billion in July.

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

In August, amortization payments more than quadrupled (350.86%) to PHP 601.62 billion from PHP 133.44 billion in the same month in 2024.

The bulk or 90.51% of the debt payments in August were made up of amortization payments, BTr data showed.

Principal payments on domestic debt surged by 389.93% to PHP 597.89 billion in August from PHP 122.03 billion a year ago.

Amortization paid on foreign debt, on the other hand, slumped by 67.29% to PHP 3.73 billion in August from PHP 11.4 billion in the same month a year ago.

On the other hand, interest payments increased by 19.56% to PHP 63.11 billion from PHP 52.78 billion a year earlier.

Domestic interest payments went up by 17.82% to PHP 46.38 billion in August from PHP 39.36 billion in the same month last year.

This was composed of P24.85 billion for fixed-rate Treasury bonds, PHP 16.87 billion for retail Treasury bonds, and PHP 4.62 billion for Treasury bills, and others (PHP 34 million).

Interest payments for foreign borrowings climbed by 24.65% to PHP 16.73 billion in August from PHP 13.42 billion a year prior.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort attributed the larger debt service bill to the PHP 516-billion government securities (GS) that matured in August.

“This is an unusual increase in NG principal payments,” he said in a Viber message over the weekend.

End-August

For the first eight months of the year, the NG debt service bill inched down by 0.6% to PHP 1.54 trillion from PHP 1.55 trillion in the same period last year.

The eight-month tally was 75.01% of the PHP 2.05-trillion debt service program this year.

Amortization payments, which made up the bulk of the total, declined by 8.07% to PHP 956.74 billion as of end-August from PHP 1.04 trillion a year ago. This was 79.32% of the PHP 1.21-trillion full-year amortization program.

Principal payments on domestic debt slipped by 12.63% to PHP 768.52 billion, while external payments increased by 16.84% to PHP 188.22 billion.

Meanwhile, interest payments went up by 14.66% to PHP 584.15 billion in the January-to-August period from PHP 509.44 billion in the same period a year ago.

This was 68.88% of the PHP 848.03-billion programmed interest payments for 2025.

Interest payments on domestic debt stood at PHP 429.12 billion, 18.31% higher year on year than PHP 362.72 billion a year ago.

Of the total interest payments on domestic debt, PHP 292.14 billion went to fixed-rate Treasury bonds, PHP 99.71 billion to retail Treasury bonds, PHP 30.36 billion to Treasury bills (T-bills), and others (PHP 6.91 billion).

On the other hand, external debt inched up by 5.66% to PHP 155.03 billion in the first eight months from PHP 146.72 billion a year ago.

Mr. Ricafort said the government is still on track to meet its PHP 2.05-trillion debt service program.

He said the debt service bill may have gone up in September as PHP 288 billion in Treasury bonds matured.

“After that, no more large NG GS maturities for the rest of 2025. Next large GS maturities that would increase NG debt servicing would be in February 2026 and April 2026 at P200 billion each,” Mr. Ricafort said. — Aubrey Rose A. Inosante