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The Bangko Sentral ng Pilipinas (BSP) said that at the end of June this year, the outstanding external debt of the Philippines was more than 87,453 million dollars, 7.6% or 6,200 million dollars more than in the same period of the year. passed $ 81,259 million, as the government borrowed more to fund pandemic programs against COVID-19.
The BSP said the year-on-year increase was due to the following: prior period adjustments amounting to $ 2.7 billion; transfer of Philippine debt securities from residents to non-residents of $ 2 billion); net cash and cash equivalents of 1,400 million dollars; and positive exchange rate (FX) revaluation of $ 89 million.
External debt was 7.4 percent or $ 6 billion higher compared to $ 81.4 billion in the previous quarter (end of March) mainly due to net cash assets of $ 2.9 billion. and these are mostly National Government (GN) loans worth $ 2.4 billion from the sale of global bonds. as well as loans of $ 3.1 billion from multilateral and bilateral creditors for the response to the pandemic.
The country’s external debt also increased due to the following: prior period adjustments of $ 2.1 billion; increased investment by non-residents in Philippine debt securities issued abroad of $ 839 million; and a positive exchange rate revaluation of $ 227 million due to the fact that the US dollar “weakened against other currencies, including the peso.”
BSP Governor Benjamin E. Diokno said that since the level of gross international reserves increased by $ 93.5 billion at the end of June and approached $ 100 billion at the end of August, the key indicators of external debt were considered at prudent levels.
The debt service ratio, which is an indicator of a country’s sufficient stock of foreign exchange, remains adequate. From January to June this year, the share increased slightly to 7.8 percent from 7.7 percent in 2019.
Total outstanding debt to GDP also rose to 23.7 percent from 21.4 percent at the end of March. According to the BSP, the current ratio continues to show a “solid and sustained position to service external loans in the medium and long term (MLT)”.
“The country’s external debt-to-GDP ratio remains one of the lowest compared to other ASEAN member countries,” the BSP noted.
At the end of June, the external debt of the public sector was higher than $ 51 billion from $ 45.1 billion at the end of March. “Approximately $ 44.4 billion of public sector obligations were loans from GN, while the remaining $ 6.6 billion corresponded to loans from government-owned and controlled corporations, government financial institutions, and the BSP,” the bank said. central.
Private sector debt also increased, but only slightly to $ 36.5 billion from $ 36.3 billion. Their share of the total decreased to 41.7 percent from 44.6 percent previously. The BSP said the increase was due to prior period adjustments of $ 2.1 billion and net endorsements of $ 334 million by private non-banks, which were offset by net repayments of $ 2.3 billion from from private banks.
The maturity profile of external debt or 87.7 percent is mainly MLT or with original maturities greater than one year. Short-term accounts or those with original maturities of up to one year represented 12.3 percent of total debt.
“The weighted average maturity for all MLT accounts increased slightly to 17 years, from 16.9 years during the previous quarter, and public sector loans have a longer average term of 20.9 years compared to 7.8 years for the private sector. This means that the foreign exchange requirements for debt repayment are well distributed and therefore more manageable, ”said the BSP.
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