PHL debt payments up 10.2% to P633.4-B in 10 mos.

According to the Bureau of Treasury (BTr), the first 10 months of 2010 saw the Philippines' debt payments up by 10.2 percent as the national government settled more maturing debts and paid more interests on existing obligations. Data provided by the bureau showed that from January to October this year, debt servicing totaled P633.43 billion — up by P58.71 billion from the P574.72 billion paid in the same period last year. Debt servicing refers to payments on interest and principal, excluding actual outflows such as the rescheduling or refinancing of existing debt and debt-to-equity conversion. The government's principal payments this year rose by 15.2 percent to P374.89 billion in the period, up from P325.31 billion a year earlier. Domestic creditors were allotted 69.7 percent or P261.5 billion, while foreign creditors were allocated 30.3 percent or P113.39 billion. Meanwhile, interest payments increased by 3.65 percent to P258.53 billion compared to P249.41 billion in the same period last year. Interest paid to domestic creditors reached P146.89 billion or 56.8 percent of the total, while 43.2 percent or P111.64 billion was paid to foreign creditors. Debt payments inched up by 2 percent to P622.3 billion in 2009 from P612.7 billion in 2008. For 2011, the Department of Finance sees debt payments increasing by 14.1 percent to P829.41 billion from the projected P726.63 billion this year. Of the total, about P462.13 billion would be for principal payments, while P367.28 billion would be for interest payments. The government is seeking to reduce debt payments to have more funds for necessary expenditures — such as infrastructure and social services spending — but has been unsuccessful due to a host of reasons, including problematic revenues and a difficult external environment. The Philippines borrows heavily to finance its ballooning budget deficit. The country this year expects a record budget deficit of P325 billion or 3.9 percent of gross domestic product (GDP), up from P298.5 billion or 3.9 percent of GDP in 2009. The Aquino administration has committed to trim the budget shortfall to 2 percent of GDP starting 2013 until 2016 the year President Aquino's term ends . — TJD/VS, GMANews.TV GMANews.TV