Q3 external debt inches up to $59.1B

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The country’s outstanding external debt approved/registered by the Bangko Sentral ng Pilipinas (BSP) went up to $59.1 billion in the third quarter of the year.

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BSP data on Friday showed that end-September external debt was higher by $1 billion, or 1.8 percent compared to the $58-billion level recorded in the second quarter of the year.

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 increase of the external debt to the increase in nonresidents’ investments in Philippine debt papers; net availments; positive foreign exchange revaluation adjustments; and previous periods’ adjustments.

However, year-on-year, debt stock dropped by $2.7 billion, or 4.3 percent from $61.7 billion recorded in the same period last year.

“Major external debt indicators remained at prudent levels in the third quarter of 2013,” BSP Governor Amando Tetangco Jr. said.

Meanwhile, the BSP data showed that the external debt ratio (a solvency indicator) or total outstanding debt expressed as a percentage of annual aggregate output slightly increased to 18.4 percent from the 18.3 percent in the previous quarter.

However, the central bank noted that a substantial improvement was noted in the ratio if compared with the 21.4-percent level a year ago.

On the other hand, the external debt service ratio, or the ratio of total principal and interest payments relative to total exports of goods and receipts from services and income, remained at 7.6 percent in the third quarter but a substantial improvement in the ratio was noted from the 8.3-percent level a year ago.

Debt profile
The BSP said that debt portfolio remained heavily leaning toward medium- to long-term (MLT) maturities, accounting for 83.2 percent of total outstanding external liabilities.

“These are scheduled to be paid over a longer time horizon, translating to more manageable levels of foreign exchange requirements for loan servicing,” the BSP stated.

The weighted average maturity for all MLT accounts stood at 20.1 years with public sector borrowings having a longer average tenor of 22.1 years compared to 9.8 years for the private sector.

Short-term external debt accounted for the 16.8-percent balance of debt stock, and consisted largely of trade credits and bank borrowings.

Furthermore, total public sector debt totaled $42.2 billion as of end-September 2013, higher than the $42-billion level in the previous quarter due to the increase in nonresident investments in Philippine debt papers, as well as upward foreign exchange revaluation adjustments.

Private sector debt also grew from $16.1 billion to $16.9 billion due to net availments.

“The creditor profile was largely unchanged: official creditors [consisting of multilateral and bilateral creditors]continued to have the largest exposure at 38 percent of total debt, followed by foreign holders of bonds/notes at 36.7 percent, and foreign banks and other financial institutions at 17.9 percent. The rest of the creditors pertained mostly to foreign suppliers/exporters,” the central bank said.

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