The country’s outstanding external debt reached $92 billion as of end-September, up by $4.5 billion or 5.2 percent from $87.5 billion level in June, Bangko Sentral ng Pilipinas Governor Benjamin Diokno said Friday.
Diokno said the increase in the foreign debt stock in the third quarter was due to net availments of $2.8 billion by private non-banks to augment working capital and $2.4 billion by the national government to fund its COVID-19 pandemic response programs/projects and various infrastructure development projects.
It said contributing to the increase in the debt level was the positive foreign exchange revaluation of $636 million as the US dollar weakened against other currencies amid a slowdown in the United States’ economic recovery and escalating US-China tension in the quarter and the increase in non-resident investments in Philippine debt papers issued offshore of $294 million.
The rise in the external debt was partially offset by prior period’s adjustments of$2.1 billion.
Data from the BSP showed that on a year-on-year basis, the foreign debt stock jumped by $9.3 billion from September 2019 on the back of net availments ($5 billion) mainly by the government and transfer of Philippine debt papers from residents to non-residents ($2.8 billion) as several credit rating agencies affirmed their confidence in the economy during the period.
Other contributors were the positive FX revaluation ($936 million) and the prior period’s adjustments ($645 million).
External debt refers to all types of borrowings by Philippine residents from non-residents, following the residency criterion for international statistics.
Diokno said that despite the increase in the external debt level, “key external debt indicators remained at prudent levels.”
He said the gross international reserves reached $100.4 billion as of end-September and represented 9.0 times cover for short-term debt based on original maturity.
The maturity profile of the external debt as of end-September 2020 remained predominantly those with original maturities longer than one year, with share to total at 87.8 percent.
Short-term accounts or those with original maturities of up to one year comprised the 12.2 percent balance of debt stock and consisted of bank liabilities, trade credits and others.
Public sector external debt increased to $54.4 billion in the third quarter from $51.0 billion in the second quarter. About $48.0 billion of public sector obligations were national government borrowings while the remaining $6.4 billion pertained to borrowings of government-owned and controlled corporations, government financial institutions and the BSP.
Private sector debt increased from $36.5 billion as of end-June to $37.6 billion as of end-September, with share to total decreasing from 41.7 percent to 40.9 percent.
The recorded rise was due to net availments of $2.8 billion by private non-banks and $1.1 billion bond issuances ($600 million and $500 million) by two private local banks.