THE country’s foreign debt has risen to $139.64 billion as of end-September 2024, up by $9.46 billion or 7.3 percent from $130.18 billion at end-June of this year.
“The rise in the country’s external debt was largely driven by the liquidity requirements of the public and private sector, as well as the increase in non-residents’ investment appetite for onshore debt securities,” The BSP said in a statement over the weekend.
Public sector external debt grew by $7.06 billion to $86.88 billion in the third quarter of 2024, from $79.83 billion in the second quarter, or 62.2 percent of the country’s total outstanding foreign debt.
Private sector borrowings rose to $52.76 billion, reflecting a $2.40 billion increase from $50.36 billion quarter-on-quarter.
The national government raised $4.17 billion during the third quarter, largely through a bond issue of $2.50 billion, or the Triple Tranche Fixed Rate Global Bonds.
The government also borrowed $1.44 billion from official creditors to finance its various development programs and projects.
“Private sector corporations likewise sought the offshore market to expand their funding base and augment their working capital with its net availments for the quarter aggregating $1.82 billion,” the BSP said.
Despite the ballooning external debt, the Bangko Sentral ng Pilipinas said the foreign debt ratio to gross domestic product remains prudent at 30.6 percent from 28.9 percent in the same comparative period.
Other key external debt indicators were also at sustainable levels, the central bank said.
Gross international reserves stood at $112.71 billion, which was enough to cover up to 3.92 times of the country’s short-term debts.
The debt service ratio, or the principal and interest payments on merchandise exports, service receipts and primary income, grew to 11.6 percent from 10.4 percent.
Investor preference to seek yields in emerging market debt securities ahead of a US Federal Reserve rate cut in September 2024 and the weakening of the US dollar during the third quarter resulted in net acquisition of Philippine debt securities by non-residents amounting to $2.77 billion.
The positive FX revaluation of borrowings denominated in other currencies as the US dollar weakened, largely against the Japanese yen, also increased the US dollar value of Philippine debt stock by $1.56 billion.
Negative adjustments in prior periods slightly tempered the increase by $248.77 million.
As of end-September 2024, BSP said the maturity profile of the country’s external debt remained predominantly medium-to-long-term (MLT) in nature. Under the remaining maturity concept, outstanding MLT borrowings stood at US$110.87 billion with its share to total at 79.4 percent.
Outstanding short-term debt under the remaining maturity concept comprised 20.6 percent, or $28.77 billion, of the total outstanding external debt.
Major creditor countries were Japan, the Netherlands, and the United Kingdom.
In terms of currency mix, the country’s debt stock remained largely in US dollar, the Philippine peso and the Japanese yen.
