NG debt service bill jumps by 12% in April

By Justine Irish D. Tabile, Senior Reporter

THE National Government’s (NG) debt service bill increased by over 12% in April amid higher interest and amortization payments, the Bureau of the Treasury (BTr) said.

The latest Treasury data showed payments made by the government for its obligations went up by 12.1% to P314.89 billion in April from P280.9 billion in the same month a year ago.

Month on month, debt service surged by 86.2% from the P169.09 billion in March.

Debt service refers to payments made by the NG for its domestic and foreign debt.

The bulk or 79.8% of debt payments consisted of amortization payments, while the rest were interest payments.

The government’s repayment of its loan principal increased by 7.2% to P251.36 billion in April from P234.45 billion a year ago.

This came as amortization on domestic debt jumped by 43.5% to P243.63 billion in April from P169.83 billion in the same month last year.

Principal payments for foreign obligations slumped by 88% to P7.73 billion in April from P64.63 billion a year prior.

On the other hand, NG’s interest payments rose by 36.8% to P63.53 billion in April from P46.45 billion in the same month a year earlier.

Interest payments for domestic debt stood at P42.89 billion in April, up by 40.8% from P30.47 billion in the same month in 2025.

Of this total, P33.11 billion went to interest payments for fixed-rate Treasury bonds, P4.36 billion for Treasury bills, and P3.56 billion for retail Treasury bonds.

Meanwhile, interest payments for foreign borrowings went up by 29.1% to P20.63 billion in April from P15.98 billion a year prior.

FOUR-MONTH BILL
For the first four months, the government’s debt service bill surged by 68.9% to P1.05 trillion from P622.92 billion in the same period last year.

Amortization payments in the January-to-April period jumped by 113.3% to P715.63 billion from P335.47 billion a year ago.

Broken down, principal payments for domestic debt soared by 269.9% to P630.37 billion, while payments for external borrowings declined by 48.3% to P85.27 billion.

Meanwhile, interest payments stood at P336.66 billion in the four months ending April, up 17.1% from P287.45 billion in the same period a year ago.

Interest payments on domestic debt jumped by 21.6% year on year to P254.29 billion in the first four months from P209.03 billion a year ago.

This consisted of P185.33 billion for fixed-rate Treasury bonds, P47.32 billion for retail Treasury bonds, P17.09 billion for Treasury bills, and P4.55 billion in interest payments for other domestic borrowings.

Interest payments on foreign obligations increased by 5% year on year to P82.37 billion in the January-to-April period from P78.42 billion a year ago.

Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion attributed the higher debt service bill to heavier principal payments, reflecting “clustered debt maturities rather than a broad deterioration in fiscal conditions.”

“The elevated P1.05-trillion year-to-date figure similarly points to front-loaded repayments and a larger debt stock, with interest costs remaining relatively stable,” he told BusinessWorld.

“For the rest of the year, the trajectory is unlikely to move in a straight line — debt service tends to be lumpy, with spikes driven by the maturity schedule. That said, the overall level should remain elevated given the still-high debt base and upcoming repayments,” he added.

The NG’s debt stock dipped by 0.09% to P18.47 trillion as of end-April from P18.49 trillion at end-March, the latest BTr data showed.

Year on year, outstanding debt went up by 10.25% from P16.75 trillion at end-April 2025.

Jose Enrique “Sonny” A. Africa, executive director of think tank IBON Foundation, flagged the government’s rising debt service burden from 2020.

“Debt service is volatile month to month but the general trend for the sixth-year running is more of scarce fiscal resources going to service debt obligations than development,” he told BusinessWorld.

“This is even more critical given the urgent need for social assistance today amid the US attack on Iran-driven oil price shocks,” he added.

Mr. Africa also noted the total debt service in the first four months is already half of the P2.1-trillion debt service bill in 2025.