PH Foreign Debt Mounts

As of end-March this year, the country's outstanding external debt stood at $118.81 billion, up by 8.25 percent compared to the same period last year when it was $109.75 billion.

The external debt is equivalent to 29% of gross domestic product (GDP), higher than 27.5% from end-December and end-March 2022. I Photo: Bongbong Marcos Facebook

The external debt is equivalent to 29% of gross domestic product (GDP), higher than 27.5% from end-December and end-March 2022.

The public sector's external debt reached $75.2 billion during the period, higher than $67.4 billion in the previous quarter. About $68.1 billion or 90.5% were National Government (NG) borrowings, while $7.1 billion were loans by government-owned and controlled corporations, government financial institutions, and the BSP.

Records show that the private sector debt stood at $43.6 billion compared to $43.9 billion at the end of 2022.

The BSP also reported that borrowings by the public sector for the NG's general financing requirements, funding of pandemic recovery measures, and other infrastructure programs, among others, contributed to the growth in the external debt stock.

The debt service ratio (DSR) increased to 12.9% from four percent in the same period last year due to repayments in the first quarter.

The DSR, which relates principal and interest payments or the debt service burden to exports of goods and receipts from services and primary income, is a measure of the adequacy of the country's foreign exchange earnings to meet maturing obligations.

The Philippines' debt stock is predominantly medium- and long-term (MLT) in nature at 85.4 percent, with original maturities longer than one year. About 14.6 percent are short-term accounts with up to one-year maturities.

This means that foreign exchange requirements for debt payments are still well spread out and manageable. The weighted average maturity for all MLT accounts is 17.3 years, with public sector borrowings having a longer average term of 20.2 years compared to 7.2 years for the private sector.

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