The Philippines’ external debt as a percentage of gross domestic product (GDP) stood at 29% as of the first quarter of 2023, data released by the Bangko Sentral ng Pilipinas (BSP) showed.
The external debt-to-GDP ratio in January to March 2023 was higher than the 27.5% seen as of December 2022.
External debt, defined as all types of borrowings by Filipinos from foreigners, amounted to $118.8 billion as of end-March 2023, up by $7.5 billion, or 6.8%, from the $111.3 billion level as of end-2022.
Year-on-year, the country’s external debt stock grew by $9.1 billion.
The BSP said the higher external debt-to-GDP ratio was “due to a change in the scope of the external debt stock to include non-resident holdings of peso-denominated debt securities issued onshore ($3.8 billion).”
The central bank said the statistical adjustment, which resulted from the availability of detailed information on non-resident holdings of said securities, is in line with International Monetary Fund standards.
“Borrowings by the public sector for the national government’s general financing requirements, funding of pandemic recovery measures, and other infrastructure programs, among others, also contributed to the growth in the debt stock,” the BSP said.
The BSP said the increase in external debt was driven by net availments of $7.6 billion, of which $7.4 billion pertain to national government borrowings; the inclusion of non-residents holdings of peso-denominated debt securities at $3.8 billion; and prior periods’ adjustments of $646 million.
Public sector external debt rose to $75.2 billion in the first quarter of 2023, from $67.4 billion year-on-year. This accounted for 63.3% of the total external debt.
About $68.1 billion, or 90.5% of public sector obligations, were national government borrowings, while the remaining $7.1 billion pertained to loans of government-owned and controlled corporations, government financial institutions, and the central bank.
Private sector debt, meanwhile, declined from $43.9 billion as of end-2022 to $43.6 billion as of end-March 2023, with its share of the total also decreasing from 39.4% to 36.7%.
“This was due mainly to net repayments of $1.3 billion, which offset: prior periods’ adjustments of $707 million; the net acquisition of Philippine debt securities by non-residents from residents of $251 million; and a positive foreign exchange revaluation of $59 million,” the BSP said.
The Philippines’ major sources of credit were Japan at $14.3 billion, the United States at $3.6 billion, and the United Kingdom at $3.2 billion.
Loans from official sources such as multilateral and bilateral creditors had the largest share at 37.9% of the total outstanding debt, followed by borrowings in the form of bonds/notes at 35.2% and obligations to foreign banks and other financial institutions at 20.9%; the rest at 5.9% were owed to other creditors, mainly suppliers or exporters.
In terms of currency mix, the central bank said the country’s debt stock remained largely denominated in the US dollar at 76% and the Japanese yen at 8.3%, while the 15.7% balance pertained to 17 other currencies, including the Philippine peso, euro, and Special Drawing Rights.
