NG debt service bill increases to P77.2 billion in June

By Justine Irish D. Tabile, Senior Reporter

THE NATIONAL Government’s (NG) debt service bill jumped in June on higher interest and amortization payments, the Bureau of the Treasury said.

The latest Treasury data showed payments made by the government for its obligations rose by 18.5% to P77.22 billion in June from P65.14 billion in the same month a year ago.

Month on month, however, debt service declined by 20.5% from P97.18 billion in May.

Debt service refers to payments made by the NG for its domestic and foreign debt.

The bulk or 80.8% of debt payments in June consisted of interest payments, while the rest were amortization payments.

The government’s interest payments rose by 8.7% to P62.43 billion in June from P57.42 billion in the same month a year earlier.

Interest payments for domestic debt stood at P39.92 billion in June, up by 3.7% from P38.48 billion in the same month in 2025.

Of the total, P19.09 billion went to interest payments for retail Treasury bonds, P15.16 billion for fixed-rate Treasury bonds, and P4.32 billion for Treasury bills.

Meanwhile, interest payments for foreign borrowings rose by 18.9% to P22.51 billion in June from P18.94 billion a year prior.

On the other hand, NG’s repayment of its loan principal surged by 91.5% to P14.79 billion in June from P7.72 billion a year ago.

These consisted of P540 million in amortization on domestic obligations, surging tenfold from P54 million a year ago, and P14.25 billion for foreign obligations, which rose by 85.8% from P7.67 billion.

SIX-MONTH BILL
For the first six months, the government’s debt service bill increased by 59.7% to P1.23 trillion from P768.11 billion in the same period last year.

In the first half, the NG’s repayment of its loan principal accounted for more than half or 60.6% of the total debt service bill.

Amortization payments in the January-to-June period jumped by 110.3% to P743 billion from P353.29 billion a year ago.

Broken down, principal payments for domestic debt soared by 270.1% to P630.91 billion, while payments for external borrowings declined by 38.7% to P112.1 billion.

Meanwhile, interest payments stood at P483.69 billion in the six months ending June, up by 16.6% from P414.82 billion in the same period a year ago.

Interest payments on domestic debt jumped by 20.3% year on year to P360.72 billion in the first six months from P299.83 billion a year ago.

This consisted of P242.16 billion in fixed-rate Treasury bonds, P87.5 billion in retail Treasury bonds, P25.15 billion in Treasury bills, and P5.9 billion in interest payments for other domestic borrowings.

Interest payments on foreign obligations increased by 6.9% year on year to P122.97 billion in the January-to-June period from P114.99 billion a year ago.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the higher debt service bill reflects maturing debt and the wider budget deficit.

The NG’s budget deficit widened by 9.39% year on year to P264.3 billion in June, bringing the six-month gap 2.79% higher at P786.8 billion.

Meanwhile, NG’s outstanding debt climbed by 2.8% to P19.07 trillion at end-June from the P18.55-trillion end-May level.

“Higher US dollar/peso exchange rate in recent years also bloated the peso equivalent of foreign debt in recent years, as well as interest payments for those foreign debts,” Mr. Ricafort said in a Viber message.

The local currency closed at P61.36 versus the dollar on June 30, weakening by P2.57 from its P58.79 close on Dec. 29, 2025.

“For the coming months, debt servicing bill would be a function of maturing debt, such as the P100-billion maturing Treasury bonds and retail Treasury bonds in September,” he said.

However, Mr. Ricafort said possible rate hikes and a still relatively higher US dollar/peso exchange rate may increase principal and interest payments.