By Lawrence Agcaoili

The continued strengthening of the peso against the US dollar and lower-than-programmed interest rates helped the Philippines save P23.4 billion in debt payments last year.

Data from the Bureau of Treasury showed that the government spent P612.7 billion to service both foreign and domestic obligations in 2008, or P23.4 billion lower than the- programmed amount of P636.1 billion.

The amount was also P1.4 billion lower than the P614.1- billion debt paid by the Philippines in 2007.

Data showed that the country saved P17.9 billion in interest payments after paying P272.22 billion, instead of the programmed amount of P290.1 billion. This was almost P10 billion higher than the P267.8- billion interest payments in 2007.

Data from the Bangko Sentral showed the peso appreciated 3.76 percent to average 44.4746 to $1 in 2008 from 46.1484 in 2007. The 91-day T-bills?used by banks in pricing their loans? averaged 5.39 percent last year from 3.410 percent in 2007.

Simulations made by the Finance Department showed that the government saved a little over P4.2 billion in debt service requirement for every P1 appreciation against the US dollar and about P5 billion for every one percentage point decline in domestic interest rates.