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The Philippines’ foreign debt reached $125.4 billion as of end-2023, representing 25.9 percent of the gross national income estimated at $484.7 billion.
It was also about 28.7 percent of the $436.6-billion gross domestic product last year, data from the Bangko Sentral ng Pilipinas showed.
The BSP said that on a quarterly basis, the fourth-quarter external debt increased by 5.5 percent from $118.8 billion in the fourth quarter. It was also up by 12.7 percent year-on-year from $111.3 billion as of end-2022.
The BSP said despite the rising foreign debt, the country’s ability to manage its foreign obligations remained manageable.
It said the gross international reserves (GIR) amounted to $103.8 billion as of end-2023, representing 6.1 times cover for short-term debt based on the original maturity concept.
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The debt service ratio (DSR), which relates principal and interest payments (debt service burden) to exports of goods and receipts from services and primary income, increased to 10.2 percent in 2023 from 6.3 percent in 2022 on higher recorded principal and interest payments brought about by rising interest rates in 2023.
The DSR and the GIR cover for ST debt are measures of the adequacy of the country’s foreign exchange (FX) resources to meet maturing obligations.
The BSP said the rise in the debt level was due largely to net availments of $4.9 billion by both private and public sector borrowers. Private sector borrowings in the fourth quarter were driven by the $3-billion availment by a non-bank firm under a syndicated loan from offshore banks.
“Proceeds from said borrowings were used to finance its capital expenditures and maturing obligations,” it said.
Public sector borrowers also tapped official creditors and the Islamic finance market through the maiden issuance of the national government’s $1-billion 5.5-year dollar-denominated Sukuk bond to fund general financing requirements, infrastructure projects and social welfare programs.
The positive FX revaluation of borrowings denominated in other currencies and the net acquisition of Philippine debt securities by non-residents from residents further increased the debt stock by $960 million and $816 million, respectively. The rise in the external debt stock was partially tempered by prior periods’ adjustments of $98 million. Darwin G. Amojelar
The BSP said the maturity profile of the country’s external debt remained predominantly medium- and long-term (MLT) in nature, with its share to total at 86.4 percent (or $108.3 billion).
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