MANILA, Philippines - Government debt payments declined in the first quarter of the year from the same period in 2011 mainly because of lower principal expenses, which offset the increase in interest payments, latest data from the Bureau of the Treasury (Btr) showed.
The government serviced P261.241 billion in debts from January to March, lower by 21 percent from the P332.065 billion in debts serviced in the same period last year.
National Treasurer Roberto Tan attributed the decline to the country’s maturity profile for the period.”It is influenced by maturities,” Tan said in an interview.
He said it is largely a result of the government’s liability management efforts.
Fiscal authorities attributed the decrease in debt payments to government efforts to lengthen maturities.
Treasury data showed that the bulk of the debt service in the first quarter went to principal payments, which amounted to P162.752 billion or lower than the P241.345 billion paid out a year ago.
Of the P162.752 billion in principal payments, the government paid P146.503 billion for domestic loans and P16.249 billion for foreign loans.
On the other hand, interest payments during the quarter amounted to P98.489 billion, higher than the P90.72 billion posted in the same period last year.
Of the P98.489 billion, P57.739 billion went to domestic creditors while P40.75 went to foreign lenders.
In March alone, government debt service amounted to P66.096 billion, lower than the P89.753 billion recorded in the same month last year.
The Aquino administration is stepping up efforts to finance its budget deficit, which is projected to hit roughly P280 billion or 2.6 percent of gross domestic product (GDP) this year.
In 2011, the government incurred a budget gap of P197 billion, below the ceiling of P300 billion set by the Aquino administration for last year.
The Aquino administration has said that it is committed to fixing the country’s fiscal position by lengthening maturities of its foreign and local obligations and by shoring up revenues. - By Iris C. Gonzales