• By The Financial District

AVERAGE FOREIGN DEBT MATURITY AT 17 YEARS

The country's external debt profile, which amounted to $87.5 billion as of the second quarter this  year, has increased to 17 years and is deemed manageable, according to the Bangko Sentral ng Pilipinas.

As of end-June 2020, the maturity profile of the country’s external debt remained predominantly MLT in nature [i.e., those with original maturities longer than one (1) year], with share to total at 87.7 percent. 


On the other hand, ST accounts [or those with original maturities of up to one (1) year] comprised the 12.3 percent balance of debt stock and consisted of bank liabilities, trade credits and others. 


BSP said the weighted average maturity for all MLT accounts slightly increased to 17.0 years, from 16.9 years during the previous quarter, with public sector borrowings having a longer average term of 20.9 years compared to 7.8 years for the private sector. This means that FX requirements for debt payments are well spread out and, thus, more manageable.


Public sector external debt increased to US$51.0 billion from US$45.1 billion in the previous quarter. About US$44.4 billion of public sector obligations were NG borrowings while the remaining US$6.6 billion pertained to borrowings of government-owned and controlled corporations, government financial institutions and the BSP.


Private sector debt slightly increased from US$36.3 billion as of end-March 2020 to US$36.5 billion as of end-June 2020, with share to total decreasing from 44.6 percent to 41.7 percent. The recorded increase was due largely to prior periods’ adjustments (US$2.1 billion) and net availments (US$334 million) by private non-banks, which were offset by net repayments (US$2.3 billion) by private banks.


Major creditor countries were: Japan (US$15.3 billion), United States of America (US$3.2 billion), The Netherlands (US$3.1 billion), and United Kingdom (US$2.6 billion).


Loans from official sources [multilateral and bilateral creditors (comprised of Japan – US$8.2 billion; China – US$1.1 billion; and Republic of Korea – US$514 million, among others)] had the largest share (34.9 percent) of total outstanding debt, followed by foreign holders of bonds and notes (33.6 percent).  Meanwhile, obligations to foreign banks and other financial institutions partake 26.3 percent; and the rest (5.1 percent) were owed to other creditor types (mainly suppliers/exporters).


In terms of currency mix, the country’s debt stock remained largely denominated in US Dollar (55.4   percent) and   Japanese   Yen (12.4   percent).  US dollar-denominated multi-currency loans from the World Bank and ADB represented 18.5 percent. The 13.7 percent balance pertained to 15 other currencies, including the Philippine Peso, Euro and Special Drawing Rights.



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@2020 by The Financial District