PHL external debt dips to $72.2 billion in June - BSP - The Daily Sentry

Saturday, September 15, 2018

PHL external debt dips to $72.2 billion in June - BSP

BSP Governor Nestor Espenilla Jr. / Photo courtesy of Bangko Sentral ng Pilipinas

Manila, Philippines – The Philippines debt slips to $72.2 billion as of end-June, says Banko Sentral ng Pilipinas (BSP) Governor Nestor Espenilla Jr, $294 million lower than the $72.49 billion in the same period of last year.

Espenilla said that the decline in the debt stock was brought about by offsetting factors including net principal repayments amounting to $2.4 billion, primarily on private sector’s short-term bank liabilities.

In relation to this, the BSP chief also cited prior period’s adjustments amounting to $1.8 billion because of late reporting as well as the transfer of Philippine debt papers from residents to non-residents of $419 million.

The BSP governor assures the public that the country’s external debt has been steadily declining from $79.95 billion in 2012, $78.49 billion in 2013, $77.67 billion in 2014, $77.47 billion in 2015, $74.76 billion in 2016, and $73.1 billion in 2017 –which may be attributed to prudent debt management and the country’s corporate borrowers’ de-leveraging from foreign borrowings in order to minimize foreign exchange (FX) risk.

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

With the data presented by BSP, the county’s external debt for end-June is also down by 1.4 percent compared to the end-March 2018 level of $73.2 billion.

The debt reduction during the second quarter of this year was primarily driven by negative foreign exchange revaluation adjustments amounting to $720 million as the dollar strengthened against third currencies, the Japanese yen in particular.

Also the decline in nonresident investments of $309 million in Philippine debt papers and net principal repayments of $246 million further contributed to the decline in the external debt stock.

As of end-June this year, the country’s debt service ratio (DSR) improved to 6.1 percent compared to 7.8 percent in end-March 2018, and 6.7 percent in end-June 2017 due to higher receipts and lower payments during the 12-month period.

Espenilla also reported that the external debt ratio has improve continuously, declining to 18.7 percent from 19.1 percent in end-March 2018 and 19.5 percent in end-June 2017.

Source: Philstar