Debt service by the national government rose marginally for full-year 2016 from a year earlier due to higher interest payments, which an analyst traced to weaker peso, data from the Bureau of the Treasury (BTr) showed.
Debt payments totaled P536.65 billion last year, up 0.47 percent from P534.14 billion in 2015.
Interest payments, which make up of the bulk or 56.71 percent of the total debt service, rose by 1.6 percent to P304.45 billion from P309.36 billion.
Domestic interest payments eased by 4.7 percent to P205.42 billion, while foreign debt service rose by 5.6 percent to P99.02 billion.
Land Bank of the Philippines market economist Guian Angelo Dumalagan said the value of interest payments on foreign debt likely increased because of the peso’s depreciation.
“The peso began to depreciate significantly since August last year due to expectations of another rate hike by the Fed and bets of faster US growth under the Trump administration,” he said.
In August, the country’s foreign debt was priced at P46.55 to a dollar. It rose to P49.76:$1 in December last year, BTr data showed.
The Philippine peso first touched the P50:$1 level on November 24 last year on expectations of interest rate hikes in the US, which actually happened in December. The peso depreciated by 5.35 percent against the US dollar in 2016.
Dumalagan said interest payments on foreign debt could increase further, given expectations of a weaker peso this year.
The peso depreciated back to the P50:$1 on Feb. 17 and is currently trading at the P50.32 level.
BTr data also showed amortization expense, or 43.26 of the total debt payment last year, was up 3.3 percent to P232.20 billion from P224.77 billion in 2015.
Domestic debt amortization fell to P112.44 billion from P154.72 billion, while foreign debt amortization rose by 70 percent to P119.75 billion from P70.04 billion.
The outstanding debt of the national government stood at P6.09 trillion as of end-2016, up 2.3 percent from P5.95 trillion in 2015.