The Philippines’ foreign debt fell 1.4 percent to $137.63 billion in the fourth quarter of 2024 from $139.64 billion in the third quarter amid foreign exchange volatility, according to the Bangko Sentral ng Pilipinas (BSP).
Data showed that on a year-on-year basis, the external debt increased from $125.39 billion in the fourth quarter of 2023.
The external debt ratio (EDT), expressed as a percentage of gross domestic product (GDP), declined to 29.8 percent from 30.6 percent in the third quarter.
The BSP said the improvement in the ratio was driven by the decline in external debt levels in conjunction with the Philippine economy’s 5.2-percent real GDP growth in the fourth quarter of 2024 and 5.6-percent expansion in the whole of 2024.
Other key external debt indicators remained at sustainable levels. Gross international reserves (GIR) stood at $106.26 billion as of end-2024 and represented 3.81 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 for the year, rose to 11.5 percent from 10.3 percent in the same period last year due to the higher recorded debt service payments.
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 decline in the country’s external debt in the last quarter of 2024 was brought about by the $1.29-billion negative foreign exchange revaluation of borrowings denominated in other currencies; net acquisition by residents of Philippine debt securities from non-residents aggregating $835.33 million; and recorded net repayments amounting to $133.51 million. Prior periods’ adjustments of $242.74 million partially increased the debt stock.
The BSP said the appreciation of the US dollar decreased the value of the country’s debt stock by $1.29 billion. The US dollar strengthened on improved US economic performance, market perception towards Federal Reserve’s future policy path as well as expectations on the shift in US trade and investment policies under the then incoming administration.
The same underlying factors may have also triggered non-residents to offload Philippine debt securities, further lowering outstanding external debt by $835.33 million, the BSP said.
Foreign borrowings transactions in the fourth quarter of 2024 marked a reversal of the net availments recorded in the first three quarters of the year.
The maturity profile of the country’s external debt remained predominantly MLT in nature. Under the remaining maturity concept, outstanding MLT borrowings stood at $109.72 billion with its share to total at 79.7 percent.
Public sector external debt declined by 1.8 percent to $85.34 billion in the last quarter of 2024 from $86.88 billion in end-September 2024 mainly due to the $1.44 billion negative FX revaluation of borrowings denominated in other currencies.
Private sector debt slightly eased to $52.29 billion at the end of the fourth quarter of 2024, reflecting a 0.9 percent) decrease from the end-September 2024 level of $52.76 billion.