Wake Up, Philippines!

Government spends P570B for debt service

Posted in Uncategorized by Erineus on April 20, 2009

By Iris C. Gonzales Updated November 26, 2008 12:00 AM

The government spent P570.369 billion for debt service payments from January to October this year, up 1.4 percent from the P562.312 billion spent in the same period last year, latest data from the Bureau of the Treasury (BTr) showed.

Finance officials attributed the increase to higher interest payments brought about by the general uptick in interest rates across the globe amid the uncertain economic environment.

During the 10-month period, the government spent P252.293 billion for interest payments, 4.55 percent more than the P241.313 billion spent in the same period last year.

In addition, the government spent P318.076 billion for principal payments from January to October, a little less than the P320.999 billion spent in the same period last year.

Interest payments on domestic loans rose to P155.316 billion from January to October, up 14.52 percent compared to the P135.621 billion recorded in the same period last year.

On the other hand, interest payments on foreign loans declined to P96.977 billion from January to October. This was 8.24 percent lower than the P105.692 billion recorded in the same period last year, data from the BTr also showed.

For principal payments on domestic loans, the government spent P247.613 billion from January to October or P18.303 billion lower than the P265.916 billion recorded in the same period last year. This was a reduction of 6.88 percent.

On the other hand, the government spent P70.463 billion for principal payments on foreign loans or P15.38 billion more than the P55.083 billion spent in the same period last year. This is an increase of 27.9 percent.

The government has programmed to spend P607.215 billion for debt payments this year, officials earlier said. The government expects to save on interest payments due to the appreciation of the peso against the dollar.

Estimates by the Department of Finance showed that the Philippines saves as much as P4.2 billion in debt service requirement for every P1 appreciation against the dollar.

The government has been reducing its debt service payments to have more funds for the more necessary expenditures such as infrastructure and social services spending.

View previous articles from this author.

http://www.philstar.com/Article.aspx?articleid=418592

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