External debt service steady at $6.4 billion

The country’s external debt service burden of $6.44 billion end-November 2017 is hardly changed from same time in 2016 of $6.48 billion or down 0.71 percent.

Bangko Sentral ng Pilipinas (BSP) data show that principal payments during the period amounted to $4.17 billion compared to the previous year’s $4.12 billion.

Interest payments of $2.26 billion is lower by 4.28 percent year-on-year from $2.36 billion.

These are principal and interest payments on fixed medium to long term credits, loans and new money facilities. Interest payments also include fixed and revolving short-term liabilities of both banks and non-banks.

The debt service burden at this level continue to show the public and private sectors’ sufficient foreign exchange reserves to pay for maturing obligations.

The Philippine external debt as of end-September 2017 – whiich was the most recent data – totaled $72.4 billion, down by 5.6 percent or $4.3 billion compared to same time in 2016 of $76.6 billion. The decline was attributed in part to the peso weakness which encouraged borrowers to turn to domestic financing to minimize exposure to exchange rate volatility.

The public sector external debt for the January-September 2017 period fell to $37.2 billion compared to end-June 2017’s $37.5 billion. Public sector loans accounted for 51.4 percent of total debt and $30.4 billion or 81.6 percent of public sector obligations are National Government borrowings.

Private sector debt accounted for 48.6 percent of the total external debt amounting to $35.1 billion, near unchanged from end-June 2017’s $35 billion.

The BSP, commenting on the external debt data, said the country’s gross international reserves (GIR) remain adequate to address both the government and corporate sector’s foreign exchange requirements.