Philippines paid less debt in 2017

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DEBT PAYMENTS made by the Philippines declined in 2017 as amortization dropped by more than a fifth, latest Treasury data showed.

The Philippines paid P680.466 billion worth of outstanding debt last year, 13.9% less than the P789.965 billion settled in 2016, according to the Bureau of the Treasury.

In December alone, the government settled P27.963 billion of outstanding debts, lower than the P35.642 billion settled in November but 12.2% more than P24.922 billion the previous year.

Principal payments accounted for over half the amount at P369.926 billion in 2017. However, this marked a 23.8% drop from the P485.511 billion settled a year ago.

Broken down, the national government paid P229.392 billion of outstanding liabilities from domestic sources in 2017, down by a fourth from the previous year’s P311.875 billion. The Philippines also paid P140.534 billion of the amount it owed foreign creditors, 19.1% less than the P173.636 billion in offshore liabilities settled in 2016.

These involved the redemption of debt papers previously sold by the Treasury to raise fresh funds for the government, as well as assumed liabilities from state-run corporations.

On the other hand, interest payments generally steadied at P310.541 billion last year from the P304.454 billion paid in 2016. Interest payments are considered automatic appropriations under the national budget for the year, although these fell seven percent short of a P334.9-billion program for 2017.

The modest pickup in interest payments helped fuel total state disbursements to grow 11% year-on-year to P2.824 trillion in 2017.

Debts incurred by the Philippine government totalled P6.652 trillion as of end-December, up by a tenth from a year ago. Its share relative to the economy stood at 42.1%, which economic managers described as “manageable” and relatively low compared to the ratio of many other Asian countries.

The national government borrows from local and foreign sources to fund the planned increased spending and boost economic activity.

This year, economic managers set a 74-26% borrowing mix to raise P888.227 billion in favor of domestic loans, with foreign debts taking a bigger share compared to 80-20% previously. — M. L. T. Lopez