The Philippines’ relatively low external debt-to-gross national income (GNI) ratios attest to the government’s policy of sustaining its prudent borrowing activities, the Department of Finance (DOF) said in a statement yesterday.
The DOF said in its economic bulletin the Philippines has the lowest gross external debt position among the Asean-5 countries, based on the World Bank’s data.
“In the face of a slowing global economy and dampening of investment activities resulting from the coronavirus disease 2019 (COVID-19) pandemic, countries scramble for funds to fuel economic recovery,” the DOF said.
“This is where countries’ overall debt scenario is crucial. While uncertainties abound, debt metrics are among the important indicators being watched by both domestic and international investors, along with credit rating agencies,” it added.
The country posted a 20.11 percent external debt-to-GNI ratio as of 2019.
Thailand is closest behind at 34.07 percent, followed by Indonesia at 36.85 percent, while Malaysia registered 64.59 percent.
Vietnam did not have available data for 2019 but recorded a 47.86 percent external debt ratio in 2018, the DOF said.
The agency also said as a percent of exports of goods and services and primary income, the Philippines’ external debt ratio dropped to 54.4 percent in the first quarter of 2020 from 54.8 percent in the same period last year.
The decline is due primarily to public sector debt, the DOF said, which dropped from $40.13 billion to $38.3 billion.
The agency said compared with two decades ago, when the country was recovering from the Asian financial crisis, the external debt ratio in 2020 was significantly lower at 51.2 percent of the debt-exports ratio in 2000.
“While the realities brought about by the health crisis has significantly changed the global economic and financial landscape, the government is steadfast in pursuing various reforms to raise much needed revenues to stimulate the economy and at the same time enhance the fiscal space,” the DOF said.