The country’s outstanding external debt declined in the first quarter of the year, according to the Bangko Sental ng Pilipinas (BSP).
In a statement, BSP Governor Amando Tetangco Jr. announced that the end-March external debt stood at $59 billion.
The end-March figure was lower by $1.3 billion, or 2.1 percent compared to the $60.3 billion level at the close of 2012.
External debt refers to all types of borrowings by Philippine residents from nonresidents that are approved/registered by the BSP.
The central bank attributed the figure from the negative foreign exchange revaluation as
the United States dollar strengthened in the first quarter of the year, particularly against the Japanese yen, which ducked the dollar value of yen-denominated loans.
Year-on-year, the external debt dropped by $2.6 billion, or 4.2 percent because of negative foreign exchange revaluation adjustments at $2 billion, and increased investments by residents in the Philippine debt papers at $727 million.
“Major external debt indicators remained at comfortable levels in the first quarter of 2013,” Tetangco said
The BSP added that external debt ratio to gross national income reflected sustained improvement, as it declined to 19.1 percent from 22.5 percent a year ago.
Meanwhile, external debt ratio to gross domestic product was also down to 22.8 percent in March 2013 from 26.9 percent a year ago.
The central bank attributed the decline to the 7.8-percent expansion of the Philippine economy in the first quarter of the year.
The ratio is an indicator of solvency and reflects the country’s strong capacity to repay long-term foreign obligations.
On the other hand, external debt service ratio (DSR) improved to 7.8 percent in March this year from 9.4 percent a year ago.
DSR—or the ratio of total principal and interest payments relative to total exports of goods and receipts form services and income—is a measure of sufficiency of foreign exchange to meet currently maturing obligations.
The BSP added that the ratio “remains well below the 20-percent to 25-percent international benchmark, indicating a very strong liquidity position vis-à-vis payments obligations.”