THE country’s outstanding external debt totalled $76.4 billion as of end-September, Bangko Sentral ng Pilipinas (BSP) data released on Friday showed, up from a quarter and a year earlier.
It was $4.2 billion higher than the $72.2 billion posted three months previously, largely due to net availments totalling $6.0 billion for both the public ($2.2 billion) and private ($3.8 billion) sectors.
“The impact of this development was partially offset by the $1.1-billion [in] negative foreign exchange (FX) revaluation adjustments as the US dollar strengthened against third currencies, particularly the Philippine peso ($787 million) and Japanese yen ($262 million),” the Bangko Sentral said in a statement.
Year-on-year, the debt stock rose by 5.6 percent as new borrowings exceeded loan repayments by $4.4 billion, the central bank added.
“Prior periods’ adjustments ($585 million) and increase in non-resident holdings of Philippine debt papers issued offshore ($195 million) further increased the debt levels, but the negative FX revaluation adjustments ($1.1 billion) partially reduced the upward impact on debt obligations,” it continued.
Expressed as a percentage of annual aggregate output, external debt widened to 19.6 percent from 19.4 percent a year earlier.
“The same trend was observed using gross domestic product. The ratio indicates the country’s sustained strong position to service foreign borrowings in the medium to long-term,” the BSP said.
The country’s debt service ratio (DSR) also increased to 6.5 percent from 6.0 percent a year ago.
“The DSR has consistently remained at single digit levels, and well below the international benchmark range of 20.0 to 25.0 percent,” the Bangko Sentral added.
The debt service ratio is a measure of the country’s adequacy to meet its obligations, based on foreign exchange earnings, by relating principal and interest payments to merchandise exports and receipts from services and primary income.
About 82.4 percent of the Philippines’ external debt is medium to long-term in nature with maturities of over one year. This means that foreign exchange requirements for debt payments are well spread out and, thus, more manageable, the central bank added.