MANILA, Philippines - The government paid P47.36 billion worth of debts in July, 34% lower than the P71.44 billion it settled during the same month last year, data from the Bureau of Treasury showed.
Bulk of the amount consisted of interest payments of P10.33 billion, a 73% decrease from P38.96 billion last year. Principal payments, on the other hand, fell 85% year-on-year to P4.6 billion from P32.5 billion.
Of the total interest payments, P19.11 billion was given to domestic creditors, while P23.65 billion was paid to foreign lenders.
Meanwhile, about P3.16 billion of the total principal payments was paid to domestic creditors and the remaining P1.44 billion was paid to offshore creditors.
For the first 7 months of 2010, the government's debt service dropped 5% to P453.45 billion from P432.94 billion in the same period last year.
This despite a net borrowing of P175.9 billion, nearly six and a half times the P27 billion recorded in the 7-month period of 2009. Biggest contributors to the growth in debt were the government's P68.5 billion global bonds, and P51.74 billion Samurai bonds issued in the first quarter.
The government relies heavily on borrowings to finance its budget deficit, which reached P229.4 billion in the January to July period, up 22% year-on-year.