Outstanding external debt declines further in 2nd quarter: BSP

September 15, 2017

Bangko Sentral ng Pilipinas (BSP) Officer-In-Charge Diwa Guinigundo announced Friday that outstanding Philippine external debt stood $72.5 billion as of end-June 2017, down by $1.3 billion (or 1.8 percent) from the $73.8 billion end-March 2017 level.

The decline in debt stock during the second quarter was brought about by S$1.2 billion net repayments, largely by the private sector, and an increase in residents’ investments in Philippine debt papers issued offshore of $110 million.

On a year-on-year basis, the debt stock substantially dropped by $5.2 billion (or 6.7 percent) from $77.7 billion a year ago due to: (a) net principal repayments by both the public and private sectors ($2.7 billion); (b) previous periods’ adjustments (negative $1.4 billion) due to late reporting; and (c) negative FX revaluation adjustments ($1.2 billion) arising from strengthening of the US dollar against other currencies, particularly the yen and the Philippine peso.

Gunigundo said key external debt indicators remained at comfortable levels during the second quarter.  Gross international reserves stood at $81.3 billion as of end-June and represents 5.6 times cover for short-term debt under the original maturity concept.

External debt remained largely medium- to long-term in nature and represented 79.9 percent of total.

The weighted average maturity of medium-to-term accounts stood at 17.9 years, with public sector borrowings having a longer average term of 23.7 years compared to 8.1 years for the private sector.

Loans from official sources (multilateral and bilateral creditors – $23.7 billion) and foreign banks and other financial institutions ($23.7 billion) comprised the largest share of total outstanding debt at 32.7 percent each.

Borrowings in the form of bonds/notes held by non-residents ($20.3 billion) accounted for 28.1 percent, while the rest ($4.8 billion or 6.6 percent) were mostly owed to foreign suppliers/ exporters.

In terms of currency mix, debt stock remained largely denominated in US dollar (62.8 percent) and Japanese yen (12.8 percent). US dollar-denominated multi-currency loans from the World Bank and Asian Development Bank had a 13.9 percent share to total, while the remaining 10.5 percent balance pertained to 17 other currencies, including the Philippine peso (6.5 percent), SDR ( Special Drawing Rights) (2.2 percent), and the Euro (1.3 percent). DMS