Government debt payments down 39% in January-April

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THE national government has disbursed less money for debt repayments in the first four months of this year compared to a year ago.

The latest data from the Treasury Office showed that total debt payments at the end of April contracted by 39.1% to 356.63 billion pesos from 585.8 billion pesos in the same period last year. last year.

Depreciation charges over the same period fell 61 percent year-on-year to 169.99 billion pesos from 436.12 billion pesos.

On the other hand, interest payments increased by 24.7% to reach 186.63 billion pesos against 149.68 billion pesos in the same period a year ago.

In April alone, national government debt payments fell 33.2 percent to 42.98 billion pesos from 64.29 billion pesos in the same month last year.

Broken down, depreciation charges fell 85.98 percent year-on-year to 5.67 billion pesos from 40.47 billion pesos.

Interest payments, however, jumped 56.6 percent to 37.3 billion pesos from 23.8 billion pesos in April last year.

For this year, the government has programmed debt payments to reach 1,298 billion pula.

If it came to pass, it would be higher than the 1.204 trillion pesos the government shelled out in 2021 to pay off its debts as the Covid-19 pandemic raged.

At the end of April, the stock of national government debt hit a new record high of 12.76 trillion pesos, just two months before President Duterte left office.

The national government’s debt-to-GDP ratio in the first quarter of the year hit a 17-year high of 63.5%, above the 60% threshold recommended internationally by multilateral lenders for emerging markets. like the Philippines. It is also the highest since the country’s debt-to-GDP ratio hit 65.7% in 2005 under the Arroyo administration.

Finance Secretary Carlos G. Dominguez III has since said the current level of debt remains “sustainable” as the country needs to increase borrowing for Covid-19-related spending amid weaker revenue collection during the pandemic.

The DOF recently proposed that the next administration implement a set of fiscal measures expected to generate a total average of almost 350 billion pesos per year from 2023 to 2027 to help the country overcome its debt at a faster pace.

The proposed three-pronged fiscal consolidation and resource mobilization plan includes the imposition of several taxes, the postponement for 3 years of the second tranche of personal income tax rate reductions, the widening of the base for value added tax (VAT) and the abolition of VAT. exemptions, except for education, agricultural products, health, financial sector and raw food, among others.

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