The government paid more debts in the first three months as the government widened this year’s deficit ceiling to increase expenditures on economic pump-priming activities.

Data from the Treasury Bureau showed that the government paid a total of P291.55 billion worth of debt in the first three months, higher by more than P52 billion than the P239.36 billion paid in the same period last year.

The increase in the government’s debt service was due to higher payments to the country’s foreign creditors, which almost doubled in the first quarter.

Debt paid to foreign creditors during the period jumped to P110.40 billion from P55.86 billion last year. Debt payments to domestic creditors, on the other hand, amounted to P181.15 billion, slightly lower than the P183.50 billion paid in the same period last year.

Of the P291.55 billion total debt paid, P106.32 billion were interest payments while P185.23 billion were principal payments.

Interest payments made to domestic creditors totaled P56.68 billion while principal payments reached P124.47 billion. On the other hand, interest payments to foreign creditors hit P49.64 billion while principal payments totaled P60.76 billion.

Debt service in January totaled P48.55 billion. It rose to P114.5 billion in February and then to P128.51 billion in March.

Early this month, the government raised its fiscal gap to P199.2 billion or 2.5% of the gross domestic product from P177.2 billion previously as it sees the need to support programs that would spur economic activity amid the global downturn.

This year’s budget gap was originally pegged at P40 billion but this was raised to P102 billion and then to P177.2 billion before it was projected to reach P199.2 billion.

Economic managers, however, have said that the deficit cap as well as the borrowing program may still be changed depending on various factors such as the global economic conditions, and the interest rate environment.

The additional expenditures, as well as the lower revenue collections due to a slower business activity, widened the budget gap to P119.7 billion in the first quarter, higher than the full-year deficit of P68.1 billion in 2008.

Officials have said that the government intends to borrow more to support the deficit target, which has been adjusted four times by economic managers due to the volatile economic conditions.

This year, the government intends to borrow P439 billion from domestic sources and P174.9 billion from external sources.

The national government’s debt is expected to hit around P4.4 trillion this year.