PH foreign debt hits $130.18 billion as of end-June 2024—BSP

The Philippines' total external debt (EDT) has ballooned to US$130.18 billion as of end-June 2024, the Bangko Sentral ng Pilipinas (BSP) said.

This is higher by $1.49 billion (or 1.2 percent) from the $128.69 billion level as of the end of March this year.

"The rise in the debt level was primarily driven by net availments aggregating $1.50 billion as the national government raised $2.61 billion from: (a) the issuance of its US$2.00 billion Dual Tranche Fixed Rate Global Bonds under its Sustainable Finance Framework; and (b) US$611.81 million borrowings from official creditors," the BSP said.

"Prior periods’ adjustments of US$493.28 million due to late reporting/registration by borrowers as well as net acquisitions of Philippine debt securities by non-residents from residents aggregating US$238.80 million also contributed to the rise in the debt level," it added.

The central bank said that despite the increase in the debt stock, EDT, which is expressed as a percentage of gross domestic products, is still "at a prudent level."

Compared to the end-June 2023 level of $117.92, the country's debt stock rose by $12.26 billion or 10.4 percent mainly by "net availments" of $10.36 billion, of which US$5.83 billion were borrowings by private sector entities, according to the BSP.

It added the country’s other key external debt indicators "remained at comfortable levels."

In particular, the gross international reserves (GIR)—a measure of the country's ability to settle import payments and service foreign debt—stood at $105.19 billion as of end-June 2024 and represented 3.84 times cover for short-term debt based on the remaining maturity concept.

"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, improved to 9.5 percent from 11.1 percent for the same period last year due to lower debt service payments in the first half of 2024," the BSP added.

As to the public sector external debt, this grew by $922.95 million (or 1.2 percent) to $79.83 billion in the second quarter of 2024 from the $78.90 billion level in the first quarter of 2024.

"The increase in public sector borrowings was driven mainly by total net availments of $1.75 billion as the national government tapped international capital markets and various official creditors to increase funding for its infrastructure projects and social services programs," the central bank said.

Borrowings attributed to the national government were about $73.22 billion (or 91.7 percent) of public sector obligations, while the remaining $6.61 billion (or 8.3 percent) are borrowings of government-owned and controlled corporations, government financial institutions, and the BSP.

Further, private sector debt increased to $50.36 billion at the end of the second quarter of 2024 with its share to total debt recorded at 38.7 percent.

"The $567.15 million (or 1.1 percent) increase from the end-March 2024 level of $49.79 billion was due mainly to prior periods’ adjustments of $522.86 million and the net acquisition by non-residents from residents of corporate debt securities amounting to US$398.39 million," the BSP explained.—LDF, GMA Integrated News