H1 debt service climbs 59.7% to ₧1.227T By Reine Juvierre S. Alberto
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14TH CABUYAO CITYHOOD ANNIVERSARY
HE national government paid P1.227 trillion to settle some of its debt in the first semester, more than half higher than a year earlier, as domestic debt amortization doubled. Total debt service from January to June jumped by 59.70 percent to P1.227 trillion from P768.109 billion in the same period last year, according to data from the Bureau of the Treasury. The increase in the debt service bill reflected the higher amortization, or the repayment of loan principal over time, which outpaced interest payments. First-half amortization surged by 110.31 percent year-on-year to P743.002 billion from P353.288 billion.
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Most of the amortization went to domestic lenders at P630.907 billion. The amount is 270.13 percent higher than the P170.457 billion the government paid for domestic amortization during the same six-month period. Amortization shelled out to foreign financiers declined to P112.095 billion, down by 38.69 percent from P182.831 billion a year ago. Meanwhile, interest payments, or payments determined by the interest rate of an account, rose by 16.60 percent to P483.690 billion in the first semester from P414.821 billion in the same period last year. Bulk of the interest payments, or P360.719 billion went to local debt. Domestic interest payments grew by 20.31 percent compared
to the previous year’s level of P299.827 billion. The government spent P242.164 billion for interest payments incurred from fixed-rate Treasury bonds, P87.502 billion for retail Treasury bonds and P25.150 billion for Treasury bills. The remaining, or P122.971 billion, of interest payments went to foreign obligations. First-half external interest payments increased by 6.94 percent from P114.994 billion a year ago. For the month of June, the government’s debt payments grew by 18.54 percent year-onyear to P77.219 billion from P65.141 billion. Interest payments accounted for the bulk of the debt service bill at P62.431 billion, up by 8.73 percent from last year’s P57.420
billion. Amortization, meanwhile, nearly doubled to P14.788 billion from P7.721 billion a year ago. This comes against the backdrop of the national government’s debtto-GDP (gross domestic product) ratio rising to a 22-year-high at 66 percent in the second quarter, after the economy grew disappointingly and the debt stock continued to climb. (See: https://businessmirror.com.ph/2026/08/08/ debt-to-gdp-ratio-climbs-to66-in-q2-a-22-year-high/). The ratio was the highest since 2004, when it stood at 71.6 percent, as the country’s fiscal position has become “more constrained,” said Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion. “The economy, which serves as See “Debt,” A2
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Monday, August 10, 2026 Vol. 21 No. 300
P25.00 nationwide | 2 sections 24 pages | 7 DAYS A WEEK
By Andrea E. San Juan
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ESPITE the latest growth print disappointment, the central bank will be forced to continue hiking rates as the Philippine economy’s fight against inflation is far from over, according to analysts.
“The Q2 GDP disappointment will unlikely derail [Bangko Sentral ng Pilipinas] BSP’s hiking cycle, in our view, because it remains focused on bringing inflation back to target over the policy horizon and anchoring inflation expectations, rather than supporting domestic demand,” Japan-based Nomura Global Markets Research said in a report over the weekend after the Philippine Statistics Authority (PSA) released the second-quarter GDP data showing only a 2.3-percent growth. Nomura also pointed out that the central bank may have also become vigilant over the “emergence” of new sources of inflation risk in the coming months, which it said “could coincide with a turnaround in fiscal spending.” Nonetheless, with the output gap remaining “negative” in the second quarter of 2026, the Japan-based research unit of Nomura Group said: “We believe BSP will likely maintain a measured approach to monetary tightening.” Nomura maintains its forecast of another 50 basis points (bps) of BSP hikes this year, delivered in 25bp “clips” over each of the next two meetings of the monetary board—in August and October. Bank of the Philippine Islands (BPI) Senior Vice President and Lead Economist Emilio S. Neri Jr. said in a commentary over the weekend that recent policy actions suggest that the central bank is attempting to balance the need to bring inflation under control while avoiding a sharp slowdown in economic activity, resulting in a “gradual pace” of tightening in recent months. However, Neri pointed out: “A larger rate increase later in the year cannot be ruled out, particularly if the impact on El Niño on food prices proves more severe than currently anticipated.” ANZ Research, for its part, said despite inflation moderating in July and with growth slowing, the pressure on the BSP to hike rates at this month’s monetary policy meeting will reduce. See “Growth,” A2
HIGH WATER, HIGH SPIRITS Heavy rains brought by the southwest monsoon, or “habagat,” submerged parts of Cavite and forced families in Las Piñas to seek temporary shelter, while rescuers worked to bring stranded residents to safety. In Kawit, Cavite, Coast Guard personnel assisted stranded residents, providing transportation to those making their way home through floodwaters. In Pasig, meanwhile, the floodwaters brought an unexpected catch. Jerry Saunda, 54, of Pinagbuhatan, showed off an estimated 8-kilogram Cream Dory he caught at Barkadahan Bridge in Taytay, Rizal. He said the fish have become increasingly common in the floodway, reportedly swimming upstream from Laguna de Bay. He planned to give his catch to a friend for a birthday meal. NONIE REYES AND BERNARD TESTA
PAX SILICA: GAME CHANGER FOR ELECTRONICS–DEPDEV CHIEF By Justine Xyrah Garcia
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HE US-led Pax Silica initiative could be a “game changer” for the Philippine electronics sector if it helps attract investments in more advanced semiconductor manufacturing and other higher-value industries, Socioeconomic Planning Secretary Arsenio M. Balisacan said. In a chance interview with reporters recently, Balisacan said the proposed 1,620-hectare development in New Clark City could help move the country into higher-value segments of global technology supply chains. “This Pax Silica, if we succeed in attracting this kind of industry, is going to be a game changer
for that sector to become more robust,” Balisacan said. See related story in Second Front Page, A13, “Pax Silica starts at 500 has, up to 20 firms in 2028–BCDA.” He said the country’s semiconductor and electronics industry has struggled to keep pace with newer technologies, with much of its existing manufacturing base built around investments made years ago. Balisacan argued that some of these facilities remain concentrated in older-generation chips and technologies, limiting the country’s ability to capture growing demand linked to artificial intelligence and advanced electronics. See “Electronics,” A2
Nomura sees 3.8% GDP growth By Justine Xyrah Garcia
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OMURA Global Markets Research has cut its 2026 growth forecast for the Philippines following a slowdown in the second quarter, as foreign research firms see only a gradual recovery in the second half amid weak investment and still-elevated prices. Nomura on Sunday lowered its full-year gross domestic product (GDP) growth forecast to 3.8 percent from 4.6 percent, although it still expects economic activity to improve in the latter half of the year. This comes as the Philippine economy grew by 2.3 percent in the second quarter, slower than the 2.8-percent expansion in the first three months of the year and the weakest quarterly growth since the first quarter of 2021. Excluding the pandemic period, it was the slowest expansion since the fourth quarter of 2009, when GDP grew by 1.8 percent. This brought average growth in the first half to 2.6 percent, less than half the 5.4 percent recorded in the same period last year.
“We cut our 2026 GDP growth forecast to 3.8 percent from 4.6 percent, which still pencils in an improvement in H2. We maintain our call for two more 25-basis-point Bangko Sentral ng Pilipinas’ hikes this year,” Nomura said. On a seasonally adjusted basis, the economy expanded by 0.6 percent quarter-on-quarter in the second quarter, slower than the 0.9 percent »B8
growth in the first quarter. Nomura said the further moderation indicated that the economy continued to lose momentum rather than begin to recover from the prolonged slowdown associated with the floodcontrol corruption controversy. “This suggests the impact of the war in Iran See “GDP,” A2
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PESO EXCHANGE RATES n US 60.7020 n JAPAN 0.3831 n UK 81.6806 n HK 7.7388 n CHINA 8.9906 n SINGAPORE 47.3015 n AUSTRALIA 42.6614 n EU 69.9469 n KOREA 0.0427 n SAUDI ARABIA 16.1686 Source: BSP (August 7, 2026)