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External debt ratios at prudent levels—Diokno

Bangko Sentral ng Pilipinas Governor Benjamin Diokno said over the weekend the country’s external debt ratios remain at prudent levels despite an increase in the first quarter of the year.

Diokno said the outstanding external debt stood at $80.4 billion at the end of March 2019, up $1.5 billion or 1.9 percent from $79.0 billion at the end of December 2018.

BSP Governor Benjamin Diokno
“The growth in the debt level during the first quarter was due mainly to net availments of $1.8 billion as the national government raised $1.5 billion from the issuance of global bonds to fund the NG’s general financing requirements, and positive audit adjustments,” he said in a statement.

“However, the rise in the debt stock was tempered by the increase in residents’ investments in Philippine debt papers, including government bonds issued offshore,” he said.

The debt stock on year reflected an increase of $7.2 billion, brought about by net availments of $9.2 billion and adjustments $960 million in the previous period.

Diokno said the upward impact on the debt stock was partially offset by transfer of Philippine debt papers from non-residents to residents and negative foreign exchange revaluation adjustments  of $740 million.

External debt refers to all types of borrowings by Philippine residents from non-residents, following the residency criterion for international statistics.

As of end-March 2019, the maturity profile of the country’s external debt remained predominantly medium- and long-term  in nature, or those with original maturities longer than one year, with share to total at 79.1 percent.

Short-term accounts, or those with original maturities of up to one year, meanwhile, comprised the 20.9 percent balance of debt stock and consisted of bank liabilities, trade credits and others.

The weighted average maturity for all MLT accounts slightly decreased to 16.8 years from 17.0 years during the previous quarter, with public sector borrowings having a longer average term of 21 years compared to 7.6 years for the private sector. This means the foreign exchange requirements for debt payments are well spread out and, thus, more manageable.

Topics: Bangko Sentral ng Pilipinas , BSP Governor Benjamin Diokno , external debt ratios
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