Philippines' foreign debt at $128.7B as of Q1 —BSP

Japanese yen and US dollar banknotes are seen in this illustration picture taken September 23, 2022. REUTERS/ Florence Lo/ Illustration/ File photo

The Philippines’ total foreign debt as of the first quarter remains at a manageable level, according to the Bangko Sentral ng Pilipinas (BSP).

Data from the BSP showed the country’s total external debt stood at $128.7 billion as of end-March 2024, up 2.6%, or $3.3 billion, from $125.4 billion as of end-December 2023.

“Despite the increase in the debt stock, the external debt ratio—expressed as a percentage of gross domestic product (GDP)—remains at prudent levels, recording at 29% from 28.7% in the last quarter of 2023,” the central bank said.

The BSP said the country’s other key external debt indicators also remained at comfortable levels.

In particular, the gross international reserves (GIR)—a measure of the country's ability to settle import payments and service foreign debt—amounted to $104.1 billion as of March 2024.

The first quarter GIR represented 3.8 times cover for short-term debt based on the remaining maturity concept.

The BSP said the rise in the debt level was due to local entities’ net availments of $2.5 billion, largely by private sector banks, which raised $2.1 billion in funds from offshore creditors for general corporate expenditures, refinancing of borrowings, and liquidity purposes.

Moreover, the central bank said the $331 million in net availabilities by public sector entities during the period were mainly driven by the national government to fund its various projects/programs, which include initiatives to enhance tax system efficiency and foster an enabling environment for digital technology adoption.

“Positive investor sentiment also contributed to the growth in the debt stock as investments in Philippine debt securities by non-residents rose by $1.2 billion,” the BSP said.

“In addition, prior periods’ adjustments also increased the country’s debt level by $551 million. The negative $927 million foreign exchange revaluation of borrowings denominated in other currencies amid US dollar appreciation partially tempered the rise in the debt stock,” it added.

As of end-March 2024, the maturity profile of the country’s external debt remained predominantly medium and long-term in nature, with its share totaling 86.7%, or $111.6 billion.

Broken down, public sector external debt amounted to $78.9 billion, up 1.4% from $77.8 billion in the last quarter of 2023.

Public sector foreign debt accounted for 61.3% of the total external debt during the period, down from 62.1% a quarter earlier.

About $72.3 billion, or 91.6%, of the public sector’s foreign obligations are attributed to the national government, while the remaining $6.6 billion, or 8.4%, pertains to borrowings by government-owned and controlled corporations, government financial institutions, and the BSP.

Private sector debt, meanwhile, totaled $49.8 billion, accounting for 38.7% of the total.

It rose by $2.2 billion, or 4.7%, from the end-2023 level of $47.6 billion, due mainly to bond issuances by local private banks amounting to $1.8 billion.

The BSP said the major creditor countries to the Philippines were Japan at $15.2 billion, the United Kingdom at $4.6 billion, and the Netherlands at $3.9 billion.

The central bank added that loans from official sources—multilateral ($34.8 billion) and bilateral creditors ($15.9 billion)—had the largest share of $50.7 billion, or 39.4%, of the total outstanding foreign debt, followed by borrowings in the form of bonds/notes at $42.2 billion, or 32.8%, and obligations to foreign banks and other financial institutions at $28.5 billion, or 22.1%.

The remaining $7.3 billion, or 5.6% of the total, was owed to other creditors, mainly suppliers or exporters.

In terms of currency mix, the BSP said the country's foreign debt stock remained largely denominated in the US dollar at $97.8 billion, or 76% of the total, and the Japanese yen at $11.1 billion, or 8.6% of the total.

The remaining $19.8 billion, or 15.4%, belong to 17 other currencies, including the Philippine peso at $9.3 billion, or 7.2%, the euro at $5.9 billion, or 4.6%, and Special Drawing Rights at $3.8 billion, or 2.9%. —VBL, GMA Integrated News

This article Philippines' foreign debt at $128.7B as of Q1 —BSP was originally published in GMA News Online.