The Market Monitor Minding the Nation's Business
Total external debt (EDT), or borrowings owed by residents to non-residents, stood at US$137.63 billion as of end-December 2024, down by US$2.02 billion (or 1.4 percent) from the US$139.64 billion level as of end-September 2024.
The external debt ratio (EDT expressed as a percentage of gross domestic product) remains at a prudent level, falling to 29.8 percent from 30.6 percent last quarter.
This improvement in the ratio was driven by the decline in external debt levels in conjunction with the Philippine economy’s 5.2 percent real GDP growth for the fourth quarter of 2024 and 5.6 percent growth for the full year 2024.
Other key external debt indicators also remained at sustainable levels. Gross international reserves (GIR) stood at US$106.26 billion as of end-2024 and represented 3.81 times cover for short-term (ST) debt based on the remaining maturity concept.
The debt service ratio (DSR), which relates principal and interest payments (debt service burden) to exports of goods and receipts from services and primary income for the year, rose to 11.5 percent from 10.3 percent for the same period last year due to the higher recorded debt service payments.
The DSR and the GIR cover for ST debt are measures of the adequacy of the country’s foreign exchange (FX) resources to meet maturing obligations.
`The reported decline in the country’s external debt in the last quarter of 2024 was brought about by the: (a) US$1.29 billion negative FX revaluation of borrowings denominated in other currencies; (b) net acquisition by residents of Philippine debt securities from non-residents aggregating US$835.33 million; and (c) recorded net repayments amounting to US$133.51 million. Prior periods’ adjustments of US$242.74 million partially increased the debt stock.