Ph outstanding external debt declines in Q1

BANGKO Sentral ng Pilipinas Governor Amando M. Tetangco, Jr. announced that outstanding Philippine external debt stood at $73.8 billion as of end-March 2017, reflecting a decline of $958 million (or 1.3 percent) from the $74.8 billion end-December 2016 level.

The decline in the debt levels during the first quarter resulted mainly from: (a) prior periods’ adjustments (negative (-) $673 million) due to late reporting of principal payments; (b) transfer of Philippine debt papers from non-residents to residents ($497 million); and (c) net principal repayments of $255 million. The downward impact of these developments on the debt stock was partially offset by the positive foreign exchange (FX) revaluation adjustments ($466 million) as the Japanese Yen strengthened against the US Dollar.

On a year-on-year basis, the debt stock likewise dropped by $3.8 billion from the $77.6 billion level in March 2016 due to: (a) net principal repayments by both the public and private sectors ($2.1 billion); (b) previous periods’ audit adjustments (-$1.5 billion) due to late reporting; and (c) negative FX revaluation adjustments ($383 million). The full downward impact of these factors on the debt stock was slightly off- set by a modest increase in non-residents’ investments in Philippine debt papers issued offshore ($126 million) during the period.

External debt refers to all types of borrowings by Philippine residents from non-residents, following the residency criterion for international statistics.

The country’s external debt remained heavily biased towards medium- to long-term (MLT) accounts which represented 79.6 percent of total. This means that FX requirements for debt payments are well spread out and, thus, more manageable. MLT accounts are those with maturities longer than one year. BSP