Phl external debt down 4%

MANILA, Philippines - The country’s outstanding external debt stood at $59.1 billion as of September, down four percent from $61.7 billion in the same period last year, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

The decrease was “due largely to the negative foreign exchange revaluation adjustments,” the central bank said.

However, the latest figure was slightly higher than the $58 billion recorded in the first half.

The BSP said the growth from end-June is on the back of an increase in non-residents’ investments in Philippine debt papers, positive foreign exchange revaluation adjustments, and other adjustments during the period.

External debt refers to borrowings made by Philippine residents from non-residents registered at and approved by the central bank.

“Major external debt indicators remained at prudent levels in the third quarter of 2013,” the BSP said.

The country’s external debt ratio or the capacity to repay obligations over a long-term horizon, stood at 18.4 percent as of September when measured against the gross national income and at 21.9 percent based on gross domestic product.

Both ratios were better than last year’s 21.4 percent and 25.6 percent, respectively.

The BSP also noted the external debt service ratio or the percentage of total principal and interest payments to exports of goods and receipts from services and income improved to 7.6 percent from 8.3 percent last year.

It was pointed out that the figure remained well below the 20 to 25 percent international benchmark, indicating the country’s strong liquidity position.

The bulk or 83.2 percent of the total outstanding debt had medium- to long-term maturities or those payable in more than a year. The remaining 16.8 percent were short-term external debt made up of trade credits and bank borrowings.

In the nine months to September, public sector debt amounted to $42.2 billion, while private sector borrowings summed up to $16.9 billion.

The central bank said the creditor profile was largely unchanged as of September. Official creditors or multilateral and bilateral creditors had the largest exposure at 38 percent, foreign holders of bonds and notes had 36.7 percent, while foreign banks and other financial institutions at 17.9 percent.

The rest of the creditors were foreign suppliers and exports, the BSP noted.

With regard to currency mix, the bulk or 51.2 percent of the debt were denominated in dollars, while 20.2 percent were in Japanese yen.