PH foreign debt service rises by 11.57% in April

The Philippine external debt service burden as of end-April went up by 11.57 percent year-on-year to $2.777 billion from $2.489 billion, according to data from the Bangko Sentral ng Pilipinas (BSP).

Principal payments continue to record significant increases of 41.35 percent, bringing the end-April number to $1.938 billion from same period last year of $1.371 billion. This was however lower than the 117.28 percent increase at the end of the first quarter or end-March.

Interest payments again declined by 24.95 percent to $839 million from $1.118 billion same time in 2019.

BSP Governor Benjamin E. Diokno said last week that the country’s external debt to GDP ratio of 21.4 percent and the level of debt service ratio (DSR) continue to indicate the country’s “sustained capacity to service maturing foreign obligations”.

The DSR is still at single-digit levels, said Diokno. The DSR relates debt service burden to exports of goods and receipt from services and primary income.

As of end-April, the debt service burden to exports of goods and receipt from services and primary income was at 8.1 percent compared to 6.2 percent same time in 2019. This indicates there is enough stock of foreign exchange to pay for foreign loans.

The debt service burden to GDP is at 2.9 percent at the end of the first quarter from two percent in 2019.

As of end-March, the country’s outstanding external debt rose 1.23 percent year-on-year to $81.421 billion. On a quarter-onquarter basis, external debt was down by 2.6 percent.

The BSP reported that public sector external debt increased to $45.1 billion from $42.8 billion end-December while private sector debt decreased to $40.8 billion as of end-December.

“Our debt composition is more or less balanced between public sector at 55.4 percent; and private sector, the remaining 44.6 percent,” said Diokno.

External debt service burden represents principal and interest payments but does not include prepayments on future loan maturities.