By Lee C. Chipongian
Public and private sector external debt as of end-June this year increased by 12 percent year-on-year to $81.259 billion, according to Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno.
The country’s external debt on a quarter-on-quarter basis was up by $827 million or one percent.
“The rise in the debt stock during the second quarter was brought about by the increase in non-residents’ investments in Philippine debt papers issued offshore amounting to $1.2 billion and positive foreign exchange (FX) revaluation adjustments amounting to $405 million,” the BSP said.
“There where also net repayments of $650 million during the period and $133 million of adjustments which ‘partially’ offset the uptick in the debt stock,” the central bank added.
On a yearly basis, the $9.1-billion increase in debt stock was due to net availments ($8.8 billion), prior periods’ adjustments ($549 million) and foreign exchange revaluation adjustments ($385 million).
“This upward impact on the debt stock was partially offset by the transfer of Philippine debt papers from non-residents to residents of $746 million,” the BSP said.
Public sector external debt increased to $42.3 billion from $40.2 billion at end-March.
“About $35.2 billion (83.3 percent) of public sector obligations were NG (National Government) borrowings while the remaining $7 billion pertained to other government agencies’ loans,” according to the BSP.
Private sector debt, meanwhile, dropped to $39 billion as of end-June compared to $40.3 billion at end-March. Its total share to outstanding debt decreased to 48 percent from 50.1 percent.
“The recorded decline in private sector borrowings was due largely to the reduction in bank liabilities,” the BSP said.
About $15.1 billion of foreign loans were borrowed from Japan, a major creditor country to the Philippines. The US lent out $4 billion while the Netherlands and the United Kingdom released $3.2 billion and $3 billion, respectively.
The end-June foreign debt obligations – both by government and corporate borrowers – are equivalent to 23.8 percent of gross domestic product (GDP), higher than same time last year of 22.4 percent.
The BSP said the total outstanding debt as a percentage of annual aggregate output or gross national income (GNI) or GDP is a solvency indicator.
The total external debt to GNI year-on-year increased to 19.9 percent from 18.7 percent but compared to the previous quarter, it was down from 20 percent.