The Philippines’ external debt rose more than 10% in the nine-month period from $107.91 billion in the same period last year, according to BSP data.
MANILA, PHILIPPINES – The Philippines’ external debt hit a record high of $118.83 billion at the end of September due to statistical adjustments and increased borrowing by the central government, according to the Philippine Bangkok Sentral ng Pilipinas.
The Philippines’ external debt rose more than 10% in the nine-month period from $107.91 billion in the same period last year, according to BSP data.
The BSP said the year-on-year increase in the country’s outstanding debt was due to a total net utilization of $6 billion, of which $7.8 billion was mostly borrowed from the central government.
The central bank also noted that the scope of external debt had been changed to bring the reported non-resident holdings of domestically issued peso-denominated bonds to $3.3 billion in the first quarter.
Other factors that led to the increase in the country’s external debt balance include a prior period adjustment of $1.5 billion and a positive foreign exchange revaluation of $291 million, according to the BSP.
The BSP added that the $224 million sale of Philippine debt instruments issued offshore by non-residents to residents had the effect of minimally offsetting the year-on-year increase in outstanding debt.
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In the third quarter alone, external debt rose 0.8% from $117.9 billion in the same period last year, due to $2 billion in adjustments in the prior period, primarily by private sector non-bank companies.
Despite the increase, the country’s external debt to gross domestic product (GDP) ratio improved from 28.5% at the end of June to 28.1% at the end of September due to better-than-expected GDP growth in the third quarter, the BSP said. said.
The maturity profile of the country’s external debt remains mainly medium- to long-term in nature, with initial maturities exceeding one year and a total share of $101.7 billion, or 85.6%, while debt with maturities of one year or less Includes short-term accounts. The balance is 14.4 percent.
According to the BSP, public sector external debt in the third quarter fell 1 percent to $73.7 billion from $74.5 billion in the previous quarter, or 62 percent from 63.2 percent.
More than 91% of public sector debt was national government borrowing, with the remaining $6.5 billion related to loans from government-owned and controlled enterprises, government-linked financial institutions, and the BSP.
Private sector debt during the quarter rose 3.9% to $45.1 billion from $43.4 billion at the end of June, and its share of the total also fell from 36.8% to 38%.
The main creditor countries are Japan ($14.8 billion), followed by the United Kingdom ($4.1 billion) and Singapore ($3.3 billion).
Borrowings from multilateral lending institutions and bilateral creditors accounted for the largest share at 38.3%, followed by loans in the form of bonds and notes at 32.7%, and debts to foreign banks and other financial institutions at 22.5%. .
The remaining 6.6% comes from other creditors such as suppliers and exporters.
In terms of currency composition, the majority of the country’s outstanding debt is still denominated in dollars at 77%, followed by the Japanese yen at 8%.
To cover the country’s budget deficit, which spends more than it actually receives, the central government borrows heavily from domestic and foreign creditors.
The BSP added that the country’s total foreign exchange reserves were $98.1 billion at the end of September, equivalent to 5.7 times its short-term debt.