BSP: Foreign debt grew $20.4 billion during Aquino’s term

The country’s external debt stood at $77.7 billion by the end of President Aquino’s term this year, from $57.3 billion when he assumed office in June 2010, Bangko Sentral ng Pilipinas (BSP) data showed.

This figures showed that the country incurred $20.4 billion (give us figures in pesos) in additional foreign debts, consisting of both private and public obligations, during the term of Aquino.

The debt stock as of the end of last June rose by $81 million or by 0.1 percent, from $77.6 billion in March due to the foreign-exchange (FX) revaluation of $821 million, as the US dollar weakened against the yen.

The loss was offset by net repa yments of $680 million, previous periods’ adjustments due to late reporting of $44 million and reduction in non-resident holdings of Philippines debt papers at $17 million.

From a year ago, the debt stock rose by $2.7 billion or 3.6 percent from $75 billion due to FX revaluation and net borrowings of $561 million.

A $424-million decline in non-resident investments in Philippines debt papers issued offshore partly mitigated the upward trend in debt stock, BSP Gov. Amando Tetangco Jr. said.

Gross international reserves (GIR) at $85.3 billion continued to be higher than the country’s total debts as of end-June 2016, compared to $83-billion GIR in March 2016. The GIR represents 5.9 times cover for short-term (ST) debt under the original maturity concept.

The external-debt ratio, or total outstanding debt (EDT) expressed as a percentage of gross national income (GNI), improved to 21.7 percent from its 21.9-percent level in March 2016, but was higher than the 21.3-percent level recorded a year ago.

Using gross domestic product (GDP) as denominator, the ratio likewise improved to 26.2 percent, from 26.5 percent as of the end of March, as the economy posted a 7-percent growth in the second quarter of 2016 from 5.9 percent in the same period last year.

The bulk or 81.3 percent or $63.2 billion of the country’s external debt continued to be largely medium to long-term, with maturities longer than one year.
Tetangco said foreign-currency requirements for debt payments are well spread out and, thus, manageable.

Short-term debts accounted for 18.7 percent of the debt stock and consisted of bank borrowings, intercompany accounts of foreign bank branches, trade credits, and deposit liabilities.

Public-sector borrowings stood at $39.4 billion or 50.7 percent of total debt stock, higher by $440 million than the $38.9-billion level in March due to FX revaluation adjustments of $822 million, which was slightly mitigated by net repayments of $229 million and a decline in non-resident investments in Philippine debt papers of $151 million.

On the other hand, private-sector debt aggregated $38.4 billion (49.4 percent of total), down by $360 million from March 2016, due largely to net repayments of $450 million, which was partly mitigated by an increase in non-resident holdings of private-sector debt papers issued offshore amounting to $134 million.

Obligations to foreign banks and other financial institutions continued to have the largest share (32.6 percent) of outstanding debt, followed by official sources (multilateral and bilateral creditors at 31.7 percent).

Borrowings in the form of bonds/notes held by non-residents accounted for 29.1 percent, while the 6.6 percent balance was owed to other creditor types (mainly suppliers/exporters).