The country’s external debt stock rose 15.16 percent or $ 14 billion year-on-year to $ 105.93 billion at the end of September, driven by pandemic-related foreign borrowing and other stimulus national government budget (NG).

According to a report by Bangko Sentral ng Pilipinas (BSP), the stock of external debt increased due to the net availability of $ 14.3 billion mainly by the NG, and adjustments from previous periods of 2.3 billions of dollars.

However, the BSP said the increase in the level of debt was also “partly tempered” by the transfer of Philippine debt securities from non-residents to residents of $ 1.7 billion and the negative revaluation of foreign currencies by $ 987 million during the period.

On a quarterly basis, the external debt increased by 4.7% or by 4.7 billion dollars compared to 101.2 billion at the end of June. This was due to net cash of $ 5.7 billion, with NG raising $ 3 billion through the issuance of global bonds and $ 1.3 billion from official sources to finance its general financing needs and its COVID-19 pandemic response programs / projects, the BSP said on Saturday, December 7. 11.

“In addition, given the recent distribution by the International Monetary Fund of the SDR 650 billion allocation to its members on August 23, 2021, the country’s reserve assets and foreign debt level have increased by 2, 8 billion dollars or 2 billion SDR (share of the Philippines) during the quarter ”, explained the BSP.

BSP said adjustments of $ 573 million from previous periods also increased the debt stock as residents’ investments in Philippine debt securities tempered its further increase, such as the $ 992 million issuance. debt securities abroad and negative currency revaluation of $ 556 million.

BSP Governor Benjamin E. Diokno said external debt ratios remained at cautious levels in the third quarter with a GDP ratio of 27.3 percent which is still one of the lowest in the region, and a debt service ratio (DSR) of 8.1 percent due to higher payments.

The DSR indicates that the country’s foreign exchange earnings are sufficient to meet the repayments of maturing loans, while the external debt-to-GDP ratio is an indicator of solvency.

But, while the GDP ratio of 27.3% is higher than the same period in 2020 by 25.3%, Diokno said it is low and is also an indication of “a strong position. and sustainable to ensure the service of medium and long-term foreign loans (MLT). “

At the end of September, the PASB said the external debt maturity profile was still predominantly MLT or with original maturities greater than one year, or about 88.3% of the total. Short-term accounts or those with original maturities of up to one year accounted for 11.7% which are mainly bank liabilities, trade credits and others.

“The weighted average maturity of all MLT accounts increased slightly to 17.2 years, with public sector loans having a longer average term of 20.8 years compared to 7.3 years for the private sector. This means that the foreign exchange needs for debt payment are always well distributed and, therefore, manageable, ”said PASB.

Of the $ 105.94 billion debt stock, public sector borrowing amounted to $ 65.2 billion, of which $ 56.9 billion was NG borrowings while the remaining 8.4 billion was NG loans. companies owned and controlled by the state, government financial institutions and the BSP.

Private sector debt stood at $ 40.7 billion at the end of September, or 38.4% of total external debt.

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