MANILA, Philippines - The Aquino administration is looking at raising the amount of debts it will pay next year as the government intends to further improve the country's public finances, data from the Department of Budget and Management (DBM) showed on Monday.
Based on a document submitted to Congress, the budget department is asking for an allocation of P783.7 billion for the government's debt service budget in 2013, higher by 12.5 percent compared with P696.6 billion program for this year.
The amount represents about 6.6 percent of the country's economy as measured by its gross domestic product (GDP), which is slightly higher than 6.5 percent target for this year.
Of the total debt service fund, the government is planning to payoff roughly P333.9 billion in interest payments next year, higher by 5 percent compared with P317.7 billion this
The government's proposed interest payments budget for next year is equivalent to 2.8 percent of GDP, lower than this year's 3.0 percent.
Meanwhile, the debt payment's share in the 2013 total disbursements program is 16.5 percent, lower than 17.3 percent program for this year.
Principal payments, on the other hand, is projected to increase by 19 percent in 2013 to P449.8 billion from P378.9 billion this year.
The government's principal payments for 2013 will be equivalent to 3.8 percent of the country's GDP, up by three basis points from 3.5 percent in 2012.
Debt servicing refers to payments of both interest and principal. The debt service burden excludes actual outflows such as rescheduling or refinancing of existing debt and conversion of debt to equity.
In the first semester of 2012, the government debt payments reached P362.18 billion, down by 11 percent compared with P408.77 billion in the same period last year, data from the Bureau of Treasury showed.
Bulk of the debt service in the first semester was spent for principal payments amounting to P212.18 billion. Of the amount, P181.37 billion was spent for domestic maturing obligations while the remaining balance of P30.8 billion was paid to foreign creditors.
Meanwhile, interest payments by the government during the period reached P150.01 billion. Of which, P96.8 billion was used to payoff domestic debts and the remaining P53.2 billion was spent for settlement of some foreign debts.
In June alone, the government's debt payments reached P24.99 billion, lower by12 percent compared with P23.78 billion in the same month last year.
During the month, the government's interest payments amounted to P19.02 billion, while principal payments reached P5.97 billion.