Foreign debt increased 3.1 percent to $77.6 billion as of end-March 2016 from a year ago, on foreign exchange fluctuation and new borrowings by the private sector, data from Bangko Sentral ng Pilipinas show.
Bangko Sentral said outstanding external debt increased $2.3 billion from $75.3 billion registered in March 2015. It said on a quarterly basis, the figure was also higher by $166 million than $77.5 billion in December 2015.
External debt refers to all types of borrowings by Philippine residents from non-residents. It includes the foreign debt of both the government and the private sector.
Bangko Sentral Governor Amando Tetangco Jr. said in a statement that despite the increase in foreign debt, “key external debt indicators remained at very comfortable levels in the first quarter.”
He said gross international reserves of Bangko Sentral continued to exceed the external debt level. Gross international reserves climbed to $83 billion as of end-March 2016 from $80.5 billion a year earlier.
Tetangco said the foreign debt stock rose in March from a year ago, because of net debt availments amounting to $2.1 billion and foreign exchange revaluation and other adjustments in previous periods, which were partially offset by a decline in non-resident investments in Philippine debt papers.
Data showed public sector external debt amounted to $38.9 billion, or 50.1 percent of
total debt stock, which declined from $39.1 billion a year ago.
Private sector debt, however, climbed to $38.7 billion or 49.9 percent of the total from $36.2 billion in March 2015.
Bangko Sentral said obligations to foreign banks and other financial institutions accounted for 32.6 percent of outstanding foreign debt, while borrowings from multilateral and bilateral creditors represented 31.5 percent.
Borrowings in the form of bonds/notes held by non-residents accounted for 29.4 percent, while the 6.5 percent balance was mostly owed to foreign suppliers/exporters.
Foreign debt stock remained largely denominated in US dollar (63 percent) and Japanese yen (12.4 percent).
Tetangco said the external debt ratio stood at 21.9 percent of gross national income and 26.5 percent of gross national income as of end-March. The Philippine economy grew 6.9 percent growth in the first quarter.
The debt service ratio, which relates principal and interest payments to exports of goods and receipts from services and primary income, rose to 5.9 percent in March from 5.3 percent in December 2015, but remained below the international benchmark range of 20 percent to 25 percent, according to Bangko Sentral.
Bulk or 81.6 percent of the country’s external debt continued to be largely medium- to long-term debt, or those with original maturities longer than one year. This means that foreign exchange requirements for debt payments are well spread out and more manageable, Bangko Sentral said.
The weighted average maturity for all MLT accounts stood at 16.9 years. Public sector debt had a longer average term of 22.8 years, compared to eight years for the private sector.