The country stock of foreign debt stood $10.2 billion higher as at end-June this year to $117.9 billion, driven higher by loans contracted by the national government.
Changes in recognizing debt obligations, in this case adding to the debt pile peso-denominated securities held by foreign investors, equivalent to $3.7 billion, helped push the foreign debt higher, the Bangko Sentral ng Pilipinas (BSP) said.
But the bulk of increase was traced to new debt the national government contracted for the period amounting to $7.9 billion.
These obligations, however, were offset by the transfer of peso debt papers issued overseas by non-residents to residents worth $1.3 billion and so-called foreign currency adjustments of another $295 million partially tempered the rise in the debt stock, the BSP said.
Viewed quarter-on-quarter, the $117.9 billion-foreign debt in the second quarter represents an easing by $894 million or 0.8 percent from obligations of $118.8 billion a quarter earlier that brought the external debt ratio as a fraction of the gross domestic product (GDP) lower to 28.5 percent from 29 percent.
The BSP noted the country’s gross international reserves (GIR), an indicator of capacity to pay foreign debt as they mature, stood at a high $99.4 billion in June this year or 5.7 times more than short-term maturing obligations based on original maturity.
The debt service ratio which relates principal and interest payments to export of goods and receipt from services and primary income rose from 11 percent from 4.6 percent as government endeavored to pay what it owed foreign creditors in the second quarter.
The bulk of obligations or 85.3 percent equal to $100.6 billion are medium-to-long term loans (MLT) which fall due longer than a year.
The country’s creditors include Japan ($13.3 billion), the United States ($4.1 billion) and the United Kingdom ($3.7 billion).
