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Foreign debt down 6.7% in H1

BSP officer-in-charge Diwa Guinigundo said external debt stood at $72.5 billion in end-June, $5.2 billion lower than the $77.7 billion booked in end-June last year. File

MANILA, Philippines — The country’s external debt slipped 6.7 percent in the first half due to the weakening of the peso and other regional currencies against the dollar, the Bangko Sentral ng Pilipinas reported over the weekend.

BSP officer-in-charge Diwa Guinigundo said external debt stood at $72.5 billion in end-June, $5.2 billion lower than the $77.7 billion booked in end-June last year.

Guinigundo traced the decline to net principal repayments by both the public and private sectors amounting to $2.7 billion as well as previous periods’ audit adjustments worth $1.4 billion due to late reporting.

He also cited the downward foreign exchange revaluation adjustments amounting to $1.2 billion arising from the strengthening of the greenback against other currencies, particularly the peso and the Japanese yen.

External debt refers to all types of borrowings by Philippine residents from non-residents, following the residency criterion for international statistics. The debt stock remained largely denominated in dollar, accounting for 62.8 percent and Japanese yen with 12.8 percent.

The dollar-denominated multi-currency loans from the World Bank and the Asian Development Bank represented 13.9 percent of total, while the 10.5 percent balance pertained to 17 other currencies, including the peso with 6.6 percent, the International Monetary Fund with 2..1 percent, and the euro with 1.1 percent.

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Public sector debt reached $37.5 billion or 51.7 percent of the total debt stock while the private sector accounted for the remaining 48.3 percent or $35 billion.

Loans from official sources such as multilateral and bilateral creditors amounted to $23.7 billion or 32.7 percent of the total followed by foreign banks and other financial institutions at $23.7 billion for the same share of 32.7 percent.

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

The BSP deputy governor said the country’s key external debt indicators in the second quarter remained at comfortable levels as the country’s gross international reserves (GIR) stood at $81.3 billion in end-June, representing 5.6 times cover for short-term debt under the original maturity concept.

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