By Justine Irish D. Tabile, Senior Reporter
THE NATIONAL GOVERNMENT’S (NG) debt service bill jumped by over 21% in May amid higher interest and amortization payments, the Bureau of the Treasury (BTr) said.
The newest Treasury data showed payments made by the federal government for its obligations surged by 21.4% to P97.18 billion in May from P80.05 billion in the identical month a 12 months ago.
Month on month, nonetheless, debt service slumped by 69.1% from P314.89 billion in April.
Debt service refers to payments made by the NG for its domestic and foreign debt.
The majority or 87% of debt payments in May consisted of interest payments, while the remaining were amortization payments.
The federal government’s interest payments rose by 20.9% to P84.6 billion in May from P69.95 billion in the identical month a 12 months earlier.
Interest payments for domestic debt stood at P66.51 billion in May, up by 27.1% from P52.31 billion in the identical month in 2025.
Of this total, P41.68 billion went to interest payments for fixed-rate Treasury bonds, P21.09 for retail Treasury bonds, and P3.74 billion for Treasury bills.
Meanwhile, interest payments for foreign borrowings inched up by 2.5% to P18.09 billion in May from P17.64 billion a 12 months prior.
Then again, NG’s repayment of its loan principal increased by 24.6% to P12.58 billion in May from P10.09 billion a 12 months ago.
These only consisted of amortization on foreign obligations because it didn’t make principal payments on domestic debt in May this 12 months and last 12 months.
FIVE-MONTH BILL
For the first five months, the federal government’s debt service bill surged by 63.5% to P1.15 trillion from P702.97 billion in the identical period last 12 months.
Amortization payments within the January-to-May period jumped by 110.7% to P728.21 billion from P345.57 billion a 12 months ago.
Broken down, principal payments for domestic debt soared by 269.9% to P630.37 billion, while payments for external borrowings declined by 44.1% to P97.85 billion.
Meanwhile, interest payments stood at P421.26 billion within the five months ending May, up 17.9% from P357.4 billion in the identical period a 12 months ago.
Interest payments on domestic debt jumped by 22.7% 12 months on 12 months to P320.8 billion within the first five months from P261.34 billion a 12 months ago.
This consisted of P227-billion fixed-rate Treasury bonds, P68.41 billion for retail Treasury bonds, P20.83 billion for Treasury bills, and P4.55 billion in interest payments for other domestic borrowings.
Interest payments on foreign obligations increased by 4.6% 12 months on 12 months to P100.46 billion within the January-to-May period from P96.06 billion a 12 months ago.
“The rise in debt service in May and through the first five months of the 12 months likely reflects a mix of upper principal repayments and bigger interest payments as the federal government continues to service a growing debt stock,” Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion told BusinessWorld via Viber.
“The repayment schedule of maturing obligations also can create significant swings in monthly debt service figures, particularly when large domestic or external debt maturities fall inside a given period,” he added.
In the approaching months, Mr. Asuncion said debt service could remain elevated because of the federal government’s ongoing financing requirements and the rollover of maturing debt.
“Interest payments may additionally stay relatively high as portions of the debt stock proceed to reflect the upper rate of interest environment seen lately,” he said.
He added that foreign exchange rate movements could affect servicing costs for foreign currency-denominated obligations.
On Friday, the peso closed at P61.415 against the greenback, strengthening by 15 centavos from its P61.565 finish on Thursday.
University of Asia and the Pacific economist Marco Antonio C. Agonia attributed the rise in debt servicing to a bigger debt stock and elevated interest payments.
“Borrowing for the federal government’s normal operations and its response to higher oil prices mechanically increased principal repayment,” Mr. Agonia told BusinessWorld via e-mail.
“Meanwhile, elevated rates of interest from larger risk premia arising from the flood control scandal and the oil price crisis materially pushed up interest payments up to now,” he added.
The NG’s outstanding debt stood at P18.55 trillion as of end-May, inching up by 0.41% from the prior month’s level of P18.47 trillion.
12 months on 12 months, outstanding debt went up by 9.62% from P16.92 trillion at end-May 2025.