The Philippines’ external debt remains at a manageable level, even being the lowest among the Asean-5 economies in terms of ratio to the country’s gross domestic product (GDP), the Department of Finance (DOF) said over the weekend.
The country’s external debt stock stood at $97.05 billion at the end of the first quarter of the year, slightly down by 1.5 percent from its end-2020 level.
This is equivalent to 26.7 percent of GDP, of which 15.6 percentage points is contributed by the public sector and 11.1 percentage points by the private sector.
“At 26.7 percent of GDP, the country’s external debt is at manageable level. This ratio is about a half of that in 2005, at 57.3 percent, the first comparable year that uses the IMF’s (International Monetary Fund) BPM6 (sixth edition of the Balance of Payments and International Investment Position Manual) methodology in calculating balance-of-payments statistics,” the DOF said in its latest economic bulletin.
The DOF said the recent build-up in external debt was driven by the government’s resource mobilization against the coronavirus pandemic.
To recall, external debt rose to $98.5 billion as of end-2020 from the $83.62 billion recorded a year earlier.
In 2020, the public sector’s external debt increased by 35.8 percent but the private sector’s external debt actually declined by 1.1 percent, the DOF said.
In the first quarter of the year, public sector debt declined by 2.4 percent while private sector debt likewise declined by 0.2 percent.
“In Southeast Asia, the external debt-GDP ratio of the Philippines is the lowest among Asean-5 countries,” the DOF said.
The DOF’s economic bulletin showed that external debt-to-GDP ratio in selected Southeast Asian economies in 2020 is highest in Malaysia at 67.7 percent, followed by Indonesia at 39.4 percent.
Vietnam is projected to have an external debt-to-GDP ratio of 38.5 percent, Thailand with 37.9 percent and the Philippines with the lowest figure at 27.2 percent last year.
