External debt rose in fourth quarter: BSP

March 15, 2019

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno, said Friday outstanding external debt stood at $79 billion as of end-2018, up by $2.5 billion (or 3.3 percent) from the end-September 2018 level of $76.4 billion.

The growth in the debt level during the quarter was due largely to net availments of $1.6 billion as private banks borrowed offshore to fund purchases of:  high-quality liquid assets in preparation for the increase in the Liquidity Coverage Ratio threshold as part of the Basel 3 reform package issued by the Basel Committee on Banking Supervision; and b) Republic of the Philippines bills, among others, according to the BSP.

Positive foreign exchange revaluation adjustments amounting to $1 billion further contributed to the increase in the debt stock as the peso appreciated against the US dollar during the reference period due mainly to improving domestic inflation data and strong remittance inflow.

The rise in the debt stock was partially offset by $139 million increase in residents’ investments in Philippine debt papers issued offshore.

Year-on-year, debt stock grew by eight percent from the end-2017 level of $73.1 billion due largely to net availments by both public ($3.5 billion) and private sectors ($3.2 billion).

As of year-end, the maturity profile of external debt remained predominantly medium- to long-term. DMS