MANILA, Philippines - The inter-agency Development Budget Coordination Committee (DBCC) has programmed P368.3 billion in debt interest payments next year, up 12% from this year's P326.3 billion.

The latest figure is also slightly higher than the P367.3 billion 2011 interest payments earlier set by the administration of former president Gloria Arroyo.

The Bureau of Treasury had reported that the government's debt servicing in first 6 months of the year grew 12% to P406.1 billion from P361.5 billion in the same period last year.

Bulk of this consisted of principal payments, which went up 20% to P259.4 billion, while the rest were interest payments amounting to P146.7 billion, higher by only 1% year-on-year.

Of the principal payments, P164.4 billion was paid to domestic creditors, while P95 billion was paid to foreign creditors.

About P83.5 billion of the total interest payments during the period, meanwhile, went to domestic creditors, and the remaining P63.2 billion was paid to offshore creditors.

In June alone, the government's debt service decreased by 4% to P16.9 billion from P17.7 billion in the same month of 2009.

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.