THE Philippines’s debt stock against the rest of the world rose at 2019’s open, but the Bangko Sentral ng Pilipinas (BSP) said it remains a “prudent level” despite the increase.
The country’s external debt— or all types of borrowings made by local residents from non-Filipino sources—stood at $80.4 billion by the end of the first quarter, reflecting an increase of nearly $1.5 billion, or 1.9 percent, from the end-December 2018 level of $79 billion.
According to the Central Bank’s report, the increase in the country’s debt stock resulted from the net availments of $1.8 billion as the national government raised $1.5 billion from the issuance of global bonds to fund the national government’s general financing requirements, and positive audit adjustments.
This, the BSP said, could have been higher if not tempered by the increase in residents’ investments in Philippine debt papers including government bonds issued offshore.
The country’s external debt also rose compared to its year-ago level of $7.2 billion.
“The governor stated that key external debt indicators remained at prudent levels despite the rise in external debt. Gross international reserves stood at $83.6 billion as of end-March 2019 and represented five times cover for short-term debt under the original maturity concept,” the BSP said in a statement.
The BSP also reported that the maturity profile of the country’s external debt remained predominantly medium- and long-term in nature, with share to total at 79.1 percent. MLT debt are those with original maturities longer than one year.
Short-term (ST) accounts (or those with original maturities of up to one year), on the other hand, comprised the 20.9-percent balance of debt stock and consisted of bank liabilities, trade credits and others.
The weighted average maturity for all MLT accounts slightly decreased to 16.8 years from 17.0 years during the previous quarter, with public-sector borrowings having a longer average term of 21.0 years compared to 7.6 years for the private sector.
Overall, the BSP said the country’s maturity profile continues to mean that the dollar requirements for debt payments are well spread out, thus, more manageable.
The country’s debt stock is also evenly spread between the private and the public sector. In particular, public-sector external debt increased to $40.2 billion from $39.7 billion in the previous quarter, hitting a total share of 49.9 percent in the country’s external debt profile.
About $33.9 billion (84.5 percent) of public- sector obligations were NG borrowings while the remaining $6.2 billion pertained to other government agencies’ loans.
Private-sector debt also rose from $39.3 billion as of end-December 2018 to $40.3 billion as of end-March 2019, with share to total of 50.1 percent. The recorded rise in private-sector borrowings was due largely to prior periods’ adjustments of $1.0 billion.
Major creditor countries are: Japan with $14.4 billion, the United States with $3.7 billion, the Netherlands with $3.7 billion and the United Kingdom with $3.4 billion.
In terms of currency mix, the country’s debt stock remained largely denominated in US dollar at 61.2 percent and Japanese yen at 12.7 percent.