The country’s external debt remained at prudent levels in the third quarter this year despite a slight increase of $609 million to $75.6 billion from $75 billion a quarter ago, Bangko Sentral ng Pilipinas said Friday.
“The increase in the debt level was attributed to net availments of $960 million, mainly by the private sector, consisting of bank borrowings [intercompany accounts as well as loans for relending to fund various economic activities] and adjustments to reflect late reporting/corrections to previous periods’ transactions [$419 million],” Bangko Sentral said in a statement.
“The upward impact of these developments on debt stock was partially offset by the transfer of Philippine debt papers from non-residents to residents [$803 million] amid concerns on the forthcoming interest rate hike in the United States,” it said.
External debt refers to all types of borrowings by Philippine residents from non-residents, following the residency criterion for international statistics.
External debt declined $1.5 billion or 1.9 percent from $77.1 billion year-on-year due to higher investments by residents in Philippine debt papers ($2.4 billion) and negative foreign exchange revaluation adjustments ($1.4 billion) as the greenback strengthened with the gradual recovery of the US economy.
Public sector external debt comprised 50.1 percent or $37.9 billion of the total debt stock, and was slightly lower compared with 51.5 percent ($38.6 billion) in June 2015, accounted for largely by the increase in residents’ investments in Philippine debt papers ($738 million).
Private sector debt accounted for 49.9 percent of the total external debt and grew from $36.4 billion to $37.7 billion due to net availments of $1.1 billion attributed mainly to banks.
Obligations to foreign banks and other financial institutions comprised 32.4 percent of the outstanding debt, up from 30.5 percent; followed by official sources, such as multilateral and bilateral creditors, 30.8 percent; foreign holders of Philippine bonds and notes, 30 percent; and foreign suppliers and exporters, 6.8 percent.
The country’s debt stock remained largely denominated in US dollar (64.3 percent) and Japanese yen (12.2 percent). US dollar-denominated multi-currency loans from the World Bank and Asian Development Bank comprised 11.6 percent, while the 11.9-percent balance represented 18 other currencies, including the Philippine peso (7.2 percent), Singapore dollar (2.3 percent), and the Euro (1.6 percent).