The country’s outstanding external debt slightly increased by $98 million or 0.1 percent to $73.2 billion at the end of the first quarter 2018 from $73.1 billion a quarter ago, Bangko Sentral ng Pilipinas Governor Nestor Espenilla Jr. said Friday.
“The slight increase in the debt stock during the first quarter was brought about by positive foreign exchange revaluation adjustments [$621 million], due largely from the weakened US dollar against the Japanese yen which pushed the debt stock higher by $655 million,” Espenilla said in a statement
However, he said the upward pressure on the debt stock was partially mitigated by net principal repayments amounting to $735 million, which resulted mainly from the bullet payments at maturity as well as prepayments by the private sector, and the transfer of holdings of Philippine debt papers issued offshore ($472 million) by non-residents to residents.
But the debt stock declined from the end-March 2017 figure by $609 million or 0.8 percent from $73.8 billion due to net repayments ($3.4 billion), primarily on the private sector’s short-term non-trade accounts.
“This downward impact on the debt stock was partly offset by previous periods’ adjustments [positive $1.5 billion] due to late reporting; upward FX revaluation adjustments [$713 million]; and transfer of Philippine debt papers from residents to non-residents [$618 million],” Espenilla said.
External debt refers to all types of borrowings by Philippine residents from non-residents, following the residency criterion for international statistics.
Espenilla said key external debt indicators “continued to improve in the first quarter of 2018.”
Gross international reserves stood at $80.5 billion as of end-March 2018 and represented a 6.3 times cover for short-term debt under the original maturity concept.
Public sector external debt increased to $39.2 billion (or 53.6 percent of total debt stock) from $37.5 billion in the previous quarter due largely to net availments of $1.5 billion, mainly by the national government.
The government issued two bonds during the quarter—the $2-billion US dollar global bonds (of which $750 million is new money) issued in February and the RMB1.5 billion (or about $233 million) Panda bonds issued in March.
Espenilla said while there was a positive foreign exchange revaluation of $602 million, it was partially offset by the $503-million increase in residents’ investments in debt papers issued offshore by the public sector.