The foreign debt of the Philippines climbed by nearly $10 billion, or 8.3 percent, to reach $128.7 billion as of end-March from a year ago, the Bangko Sentral ng Pilipinas (BSP) said over the weekend.
It said that on a quarter-on-quarter basis, the external debt rose 2.6 percent from $125.4 billion as of end-December 2023.
The BSP said despite the uptick in the debt stock, the external debt ratio (EDT expressed as a percentage of gross domestic product) remained at prudent levels, recording at 29 percent from 28.7 percent in the last quarter of 2023.
It said that other key external debt indicators also remained at comfortable levels.
The gross international reserves (GIR) reached $104.1 billion as of end-March 2024 and represented 3.8 times cover for short-term (ST) debt based on the remaining maturity concept.
The debt service ratio (DSR), which relates principal and interest payments (debt service burden) to exports of goods and receipts from services and primary income, improved to 8.9 percent from 13 percent in the same period last year on lower scheduled debt service payments in the first quarter of 2024.
“The DSR and the GIR cover for ST debt are measures of the adequacy of the country’s foreign exchange [FX] resources to meet maturing obligations,” the BSP said.
BSP said the rise in the debt level was due to resident entities’ net availments of $2.5 billion, largely by private sector banks which raised $2.1 billion funds from offshore creditors for general corporate expenditures, refinancing of borrowings and liquidity purposes.
Meanwhile, the $331 million net availments by public sector entities were mainly driven by the national government (NG) to fund its various projects/programs which include initiatives to enhance tax system efficiency and foster an enabling environment for digital technology adoption.
“Positive investor sentiment also contributed to the growth in the debt stock as investments in Philippine debt securities by non-residents rose by $1.2 billion,” the BSP said.
Prior periods’ adjustments also increased the country’s debt level by $551 million.
The negative $927 million FX revaluation of borrowings denominated in other currencies amid US dollar appreciation partially tempered the rise in the debt stock.
Data showed that as of end-March 2024, the maturity profile of the country’s external debt remained predominantly MLT in nature or those with original maturities longer than one year, with its share to total at 86.7 percent.