Foreign debt reached $83.6 billion as of end-2019

The country’s foreign debt climbed to $83.6 billion in the fourth quarter of 2019 from $82.7 billion in the third quarter, data from the Bangko Sentral ng Pilipinas show.

It was also up from $79 billion registered in the fourth quarter of 2018.

BSP Governor Benjamin Diokno said despite the increase in foreign debt, the external debt ratios remained at prudent levels.

“The rise in the debt stock during the fourth quarter was brought about by the increase in non-residents’ investments in Philippine debt papers issued offshore of $507 million,” Diokno said in a statement.

“The upbeat investor sentiment was reflected in the generally narrower bond spreads due to positive external developments such as the initial trade deals between the US and China at the latter part of the year,” he said.  

He said the net availments of $317 million which was largely attributed to oil importation and prior periods’ adjustments of $150 million further contributed to the increase of the debt stock. These were partially offset by foreign exchange revaluation of $29 million.

Data showed that the debt stock increased by $4.7 billion or by 5.9 percent year-on-year, brought about by net availments ($3.7 billion); prior periods’ adjustments ($954 million); and FX revaluation adjustments ($170 million). 

This upward impact on the debt stock was partially offset by the transfer of Philippine debt papers from non-residents to residents ($197 million). Julito G. Rada

External debt refers to all types of borrowings by Philippine residents from non-residents, following the residency criterion for international statistics.

Diokno said that “key external debt indicators remained at prudent levels despite the rise in external debt”. 

The gross international reserves stood at $87.8 billion as of end-December 2019 and represented 5.1 times cover for short-term debt under the original maturity concept.

He said that as of end-December 2019, the maturity profile of the country’s external debt remained predominantly medium- and long-term in nature accounting for 79.4 percent of the total. 

Short-term accounts or those with original maturities of up to one year comprised 20.6 percent of debt stock and consisted of bank liabilities, trade credits, and others. 

Topics: foreign debt , Benjamin Diokno , Bangko Sentral ng Pilipinas , trade deals
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