MANILA, Philippines - The government's debt servicing in November increased by 47 percent to P26.946 billion from P18.33 billion in the same month in 2009 on the back of strong peso and lower interest rates.

Data from the Bureau of Treasury showed that the bulk of the debt service consisted of interest payments amounting to P16.441 billion, higher by 53 percent from P10.734 billion in November 2009.

Of the total interest payments, P14.299 billion were paid to domestic creditors, while P4.142 billion for the foreign creditors.

However, principal payments of the national government last month rose by 38 percent year-on-year to P10.505 billion from P7.596 billion.

About P9.956 billion of the total principal payments for the month were paid to domestic lenders and the remaining P4.549 billion were paid to offshore creditors.

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.

In January to November, the government's debt service increased by 11 percent to P660.375 billion from P593.055 billion in the same period last year. Of the total debt payments during the period, the government spent P274.975 billion in interest payments and P385.4 billion in principal.

The Department of Budget and Management earlier said the government saved P18.8 billion in interest payment in the first 11 months of 2010 due to lower borrowing costs and stronger local currency.