The amount of debt paid by the national government reached a record 1.2 trillion pesos in 2021, alongside larger bonds that have accumulated to fund the fight against the protracted COVID-19 pandemic.
The latest data from the Bureau of the Treasury (BTr) showed that last year was the first time that annual debt payments exceeded the 1 trillion peso mark. In 2020, at the start of the COVID-19 crisis, the government settled 962.5 billion pesos in debt.
Primary or amortization payments in 2021 amounted to 774.7 billion pula, also the largest since 1986, according to historical data from BTr. The government paid for 537.5 billion pesos in amortization for domestic debts and 237.2 billion pesos for external obligations.
Last year, interest payments reached 429.4 billion pesos, also the largest since 1986. Interest paid for local borrowings such as treasury bills and bonds amounted to 333.3 billion pesos, while interest paid on foreign debts amounted to 96.1 billion pesos. Actual interest payments in 2021 were lower than the 531.5 billion pesos set aside by the government.
Budget documents had shown that the national government would pay a new high of 1.3 trillion pesos in bonds – 785.2 billion pesos in principal amortization plus 512.6 billion pesos in interest – this year, alongside a further increase in outstanding debt to 13 pesos. 4 trillion by the end of 2022.
In January, the debt stood at a record 12.03 trillion pesos. It will take several generations to repay the debts – for example, the total of $25.7 billion (over 1.3 trillion pesos) the Philippines borrowed from foreign lenders for the COVID-19 response in mid- January of this year will be repaid until 2060.
—Ben O. from Vera INQ
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