The national government’s debt payments increased in September after the Duterte administration paid its loan from Bangko Sentral ng Pilipinas (BSP), used for the country’s COVID-19 response.
According to the Bureau of the Treasury’s data, the government’s total debt servicing increased by 664 percent in September 2020 to P374.06 billion from only P48.92 billion in the same month in 2019.
The Treasury said the spike in debt payments was to the government’s P300 billion “advances to BSP.”
It would be recalled that Finance Secretary Carlos G. Dominguez III said the Treasury released P300 billion to BSP to repay the loan under their repurchase agreement.
In March, the central bank’s policy-making Monetary Board allowed the BSP to purchase government securities from the Treasury to support the government’s efforts in addressing the impact of the COVID-19 pandemic.
However, days after the Treasury paid the BSP, the national government asked the central bank for a new P540 billion loan to support its COVID-19 response. The recent advances would be settled on or before December 29 at zero interest.
Gov’t debt payments increase in September
Republic Act 7653, or the “New Central Bank Act,” allowed the bond-buying activity between the BSP and the Treasury, but with a maximum repayment period of six months
In end-September, the national government’s total debt payments soared by 103 percent to P1.135 trillion from P558.2 billion in the same period in 2019.
January to September amortization reached P821.74 billion, an increase of 211 percent compared with P264.48 billion last year. Of that amount, P123.18 billion paid to foreign creditors, and P698.55 billion were paid to local lenders.
An increase of 6.5 percent to P312.97 billion in the first nine-months of the year from P293.74 billion in the same period in 2019 for interest payments was also recorded. Domestic bank received P224.28 billion, while foreign creditors got P88.69 billion in total.
As of August, the national government’s outstanding debt was at P9.615-trillion, higher by 4.9 percent, or P451 billion, compared with the previous month’s level of P9.164-trillion.
Of the total debt stock, 69.8 percent are from Filipino lenders, while 30.2 percent were from foreign creditors.