Foreign debt climbs 5 percent to $154.9 billion in Q2
The country’s outstanding external debt rose to $154.93 billion in end-June, driven mainly by fresh borrowings of the national government and private domestic banks, although the Bangko Sentral ng Pilipinas (BSP) said the country’s foreign debt position remained manageable.
The Philippines' external debt surged by 5.1 percent to $154.93 billion by the end of June, according to the Bangko Sentral ng Pilipinas (BSP). This rise was primarily fueled by borrowing from the national government and private domestic banks, although the BSP noted the country's foreign debt position remained manageable. The debt-to-GDP ratio climbed to 31.6 percent from 30 percent in the previous quarter, indicating that debt grew faster than the economy.
External debt now amounts to 31.6 percent of the country's GDP, up from 30 percent in the prior quarter. The BSP stated that the increase in the debt stock was mainly due to net borrowing activity from the national government and private domestic banks. The government's external obligations totaled $98.54 billion, with $92.85 billion owed by the national government and other public non-bank borrowers.
Private sector debt climbed to $56.40 billion, with $24.45 billion held by private banks and $31.95 billion by private non-banks. Most of the country's external debt is medium- and long-term, reaching $134.33 billion by the end of June, while short-term debt stands at $20.61 billion. Bondholders and noteholders hold $49.23 billion, while banks and financial institutions hold $36.35 billion.
Multilateral institutions' debts amount to $43.18 billion, including $18.82 billion owed to the Asian Development Bank and $16.9 billion to the International Bank for Reconstruction and Development. Bilateral debt reached $19.23 billion. Even with the higher debt stock, the BSP affirmed that the Philippines retains enough foreign exchange reserves to meet near-term obligations.
Short-term external debt based on remaining maturity, amounting to $31.64 billion, is well covered by the country's $104.74-billion gross international reserves, which are more than three times the amount of external debt due within a year. The debt service ratio eased to 9 percent, indicating that a smaller portion of the country's foreign exchange earnings is needed to repay external debt.
The BSP concluded that the external debt position remained broadly manageable due to sound solvency indicators and adequate liquidity buffers.
Written by urgent.news from Philippine Star Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
