First-half debt service jumped 41% to P1.28t

The government’s debt service jumped 41.1 percent in the first six months of 2024 on higher interest payments and amortization, the Bureau of the Treasury (BTr) said over the weekend.

Data from the BTr showed the total debt payments from January to June amounted to P1.28 trillion, up from P907.92 billion in the same period last year.

Interest payments in the first six months climbed 33.55 percent to P377.22 billion from P282.45 billion a year ago.  Principal amortization also went up 44.7 percent to P905.55 billion from P625.46 billion.

Debt service in June amounted to P66.07 billion, lower than P88.40 billion in the same month last year.

Outstanding government debt climbed to P15.48 trillion as of end-June 2024, a 0.9 percent increase from the end-May level on new borrowings and the peso’s depreciation against the US dollar. Of the total debt stock, 31.71 percent was external debt, while 68.29 percent represented domestic debt.

The end-June domestic debt level increased 1.2 percent to P10.57 trillion from the end-May 2024 level.  The government targets to bring down the debt-to-gross domestic product (GDP) ratio to 57 percent by 2028.

The Treasury said that with the release of the second-quarter gross domestic product (GDP) which grew by 6.3 percent year-on-year, the debt-to-GDP ratio was recorded at 60.9 percent as of end-June 2024, slightly down from 61.0 percent a year ago and 60.1 percent at the end of 2023.

The national government’s fiscal deficit settled at 5.3 percent of GDP in the second quarter of 2024 and 4.9 percent in the first half. The 2024 fiscal turnouts reflected an increase from the 4.8 percent deficit-to-GDP ratio for the second quarter and first half of 2023.

The government is projecting a full-year fiscal deficit equivalent to 5.6 percent of GDP in 2024, coming from 6.2 percent in 2023 in line with fiscal consolidation efforts.

Meanwhile, the debt ratio is programmed to hit 60.6 percent of GDP in line with the latest approved fiscal and growth assumptions of the Development Budget Coordination Committee (DBCC). In 2023, the debt to GDP ratio was at 60.1 percent, down from 60.9 percent in 2022.