By Justine Irish D. Tabile, Senior Reporter
THE NATIONAL Government’s (NG) debt service bill surged greater than sixfold in February, mainly attributable to an enormous increase in domestic amortization, data from the Bureau of the Treasury (BTr) showed.
Debt payments jumped by 725.7% to P430.64 billion in February from the P52.15 billion recorded a yr earlier.
Month on month, debt service went up by 212.8% from P137.67 billion in January.
Debt service refers to payments made by the NG on its domestic and foreign debt.
In February, the federal government’s repayment of its loan principal or amortization accounted for the majority or 88.6% of total debt service, while the remaining went to interest payments.
Principal payments sharply increased by 10,191.5% to P381.71 billion in February from P3.71 billion a yr ago.
This was mainly attributable to the surge in amortization on domestic debt to P378.51 billion in February from just P121 million in the identical month in 2025.
“Domestic amortization reflects actual principal repayments to creditors, including those serviced by the BSF (Bond Sinking Fund),” the Treasury said.
External principal payments, then again, declined by 10.8% to P3.2 billion in February from P3.59 billion in the identical month last yr.
Meanwhile, interest payments inched up by 1% to P48.93 billion in February from P48.45 billion in the identical month a yr earlier.
Domestic interest payments fell by 11.9% to P37.08 billion in February from P42.07 billion a yr ago. Broken down, P19.78 billion went to interest payments for fixed-rate Treasury bonds, P11.95 billion for retail Treasury bonds, and P4.63 billion for Treasury bills.
Interest payments on external debt jumped by 85.8% to P11.85 billion in February from P6.38 billion a yr ago.
For the primary two months of 2025, the federal government’s debt service surged by over thrice or 258.2% to P568.31 billion from P158.66 billion in the identical period last yr.
Amortization payments for the January-to-February period jumped by 6,669.8% to P391.57 billion from P5.78 billion a yr ago.
Principal payments accounted for 68.9% of the whole debt payments in the primary two months of 2026.
Principal payments on domestic debt went up by 88,166.4% to P386.61 billion from P438 million, while those for external debt slipped by 7.3% to P4.96 billion from P5.34 billion.
However, interest payments rose by 15.6% to P176.75 billion as of end-February from P152.88 billion in the identical period a yr ago.
Interest payments on domestic debt jumped by 15.2% to P131.68 billion from P114.35 billion, while external debt payments went up by 17% to P45.06 billion from P38.53 billion.
“(The rise is) largely attributable to lump-sum and timing-related payments, particularly large maturities or scheduled principal repayments falling throughout the month,” Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera said in a Viber message.
“Debt service figures are inclined to be volatile and must be interpreted within the context of the general annual financing program,” he added.
Within the Budget of Expenditures and Sources of Financing 2026, the federal government has set a P2-trillion debt service program for the yr, of which P1.05 trillion is for principal payments and P950 billion is for interest payments.
Michael L. Ricafort, chief economist at Rizal Business Banking Corp., said that the surge is essentially attributable to the P232-billion 7-year Treasury bond that matured on Feb. 14.
“Moreover, the upper US dollar-peso exchange rate led to higher debt servicing in pesos of US dollars and other foreign currency-denominated debts, each principal and interest payments,” he said in a Viber message.
Mr. Ricafort said wider budget deficits, that are partly attributable to higher prices which have inflated government expenditures in recent times, also contributed to increased debt servicing costs over time.
The National Government’s budget deficit inched down by 0.14% to P171.2 billion in February from P171.4 billion in the identical month a yr ago.
Inflation rose 2.4% in February, the quickest pace since 2.9% in January 2025.
For the approaching months, Mr. Ricafort said that the NG debt service bill could go up amid the maturity of a P282-billion 5-year Treasury bond by April 8.
“Higher US dollar-peso exchange rate, higher prices that would bloat the budget deficit, and better rates of interest for the reason that war within the Middle East began on Feb. 28 may lead to higher debt servicing costs, each principal and interest payments, going forward,” he added.
Mr. Rivera said debt payments are expected to stay “elevated but manageable.”
“While higher global rates of interest may keep debt servicing costs up, the secret’s that these are planned obligations, and the federal government is more likely to proceed managing them through a mixture of domestic and external borrowing and prudent debt strategy,” he added.