By Justine Irish D. Tabile, Senior Reporter
THE NATIONAL Government’s (NG) debt service bill declined by over 36% in September on lower amortization payments, the Bureau of the Treasury (BTr) said.
The latest Treasury data showed payments made by the government for its obligations dropped by 36.73% to P207.46 billion in September from P327.89 billion in the same month a year ago.
Month on month, however, debt service surged by 172.56% from P76.12 billion in August.
Debt service refers to principal and interest payments made by the NG on its domestic and foreign debt.
More than half or 58.75% of debt payments in September went to amortization, while the rest were for interest.
The NG’s repayment of its loan principal dropped by 50.49% to P121.89 billion in September from P246.19 billion a year ago.
Amortization payments on domestic debt fell by 53.7% to P109.97 billion in September from P237.93 billion a year earlier, while payments on foreign debt rose by 44.26% to P11.92 billion from P8.26 billion.
On the other hand, the government’s interest payments rose by 4.73% to P85.57 billion in September from P81.7 billion in the same month a year earlier.
Interest payments on domestic debt stood at P69.05 billion in September, up by 5.78% from P65.27 billion in the same month in 2025.
Of the total, P44.67 billion went to interest for fixed-rate Treasury bonds, P19.09 billion for retail Treasury bonds, and P5.25 billion for Treasury bills.
Meanwhile, interest payments for foreign borrowings inched up by 0.57% to P16.53 billion in September from P16.43 billion a year prior.
NINE-MONTH BILL DROPS
For the first nine months, the government’s debt service bill went down by 11.69% to P1.65 trillion from P1.87 trillion in the same period last year.
In the January-to-September period, the NG’s repayment of its loan principal accounted for more than half or 53.22% of the total debt service bill.
Amortization payments in the January-to-September period fell by 26.99% to P878.21 billion from P1.2 trillion a year ago.
Broken down, principal payments for domestic debt declined by 26.37% to P741.01 billion from P1.01 trillion a year ago, while payments for external borrowings declined by 30.17% to P137.2 billion from P196.48 billion.
Meanwhile, interest payments stood at P772.05 billion in the nine months ending September, up by 15.95% from P665.85 billion in the same period a year ago.
Interest payments on domestic debt jumped by 18.27% year on year to P584.74 billion in the first nine months from P494.39 billion a year ago.
These consisted of P404.52 billion for fixed-rate Treasury bonds, P131.24 billion for retail Treasury bonds, P41.15 billion for Treasury bills, and P7.82 billion for interest payments for other domestic borrowings.
Interest payments on foreign obligations increased by 9.25% year on year to P187.32 billion in the January-to-September period from P171.46 billion a year ago.
Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas, meanwhile, said the decline in the total bill reflects “lower principal repayments and base effects more than a reduced debt burden.”
“Going forward, debt servicing should stay manageable, with lower rates helping offset the impact of a still-rising debt stock,” he told BusinessWorld in a Viber message.
The NG’s outstanding debt rose to a fresh high of P19.66 trillion at end-September, inching up by 0.27% or P53.47 billion from P19.61 trillion at end-August.
Year on year, outstanding debt rose by 12.63% from P17.46 trillion at end-September 2025.
Year to date, it jumped by 11.03% from P17.71 trillion at end-2025.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the lower bill could be a “function of lower matured government debt, principal and interest payments, as well as other payables during the month.”
He said debt servicing in the coming months would depend on interest payments and US dollar/peso exchange.
“There are also year-end debt payments that seasonally widen the budget deficit towards yearend,” he added.
On Friday, the local unit strengthened by 11 centavos to close at P63.74 per dollar from its P63.85 finish on Thursday.
Month on month, the peso weakened by P1.10 on Oct. 30 versus its P62.64 close on Sept. 30.