Debt payments fall sharply to P66 billion in October

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December 8, 2025 | 12:00am

MANILA, Philippines — The national government’s debt service declined by nearly 70 percent in October, driven by lower interest payments on external obligations and fewer maturing securities, which helped reduce amortization costs.

Latest data from the Bureau of the Treasury showed that the government decreased its debt payments to P65.78 billion in October from P216.85 billion a year ago.

About 87.2 percent of the debt service pile consisted of interest payments, amounting to P57.37 billion for the period, which is slightly higher than the P55.39 billion recorded in October last year.

Domestic interest payments rose by 18.3 percent to P41.8 billion from P35.33 billion, reflecting the continued dominance of domestic obligations in the government’s overall debt service profile during the period.

The government issued P32.9 billion in fixed-rate Treasury bonds, P3.57 billion in retail T-bonds and P3.81 billion in Treasury bills (T-bills) for October.

The Treasury conducts weekly government securities auctions to generate funds, which help finance essential public services, infrastructure and development projects to aid communities across the country.

Short-term T-bills mature in 91, 182 or 364 days, providing quick returns, whereas long-term T-bonds span over 20 years, guaranteeing stable financing for the government’s funding requirements.

On the other hand, October’s external interest payments dropped by 22 percent, declining to P15.57 billion from P20.05 billion year-on-year.

Furthermore, the remaining 12.8 percent of the debt service pile was allocated to amortization spending, amounting to P8.42 billion.

This indicates that the national government’s expenditures were nearly 95 percent lower compared to the P161.46 billion it spent during the same period last year, reflecting a substantial reduction in maturing securities.

Amortization spending involves setting aside funds to repay the principal of government loans, thereby helping to lower the total debt burden.

Domestic amortization payments amounted to P2.49 billion, which is significantly lower than the P120 billion recorded in October last year. For external amortization, it only amounted to P5.93 billion from P41.46 billion in the same month last year.

From January to October, the government’s total debt service stood at 1.93 billion, nearly four percent higher than the P1.86 billion in the ten-month period last year.