BSP-External Debt Ratio Slightly Eases Amid Faster Economic Growth.
ENPNewswire-September 20, 2021--BSP-External Debt Ratio Slightly Eases Amid Faster Economic Growth
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Release date- 17092021 - ?Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno announced that the Philippines' outstanding external debt remained at a prudent level as its ratio to Gross Domestic Product (GDP) slightly eased to 26.5 percent at end-June 2021 from 26.6 percent a quarter ago.
This is reflective of the faster economic growth in the second quarter.
The Governor further stated that other key external debt indicators also remained at prudent levels. Gross International Reserves (GIR) stood at US$105.8 billion as of end-June 2021 and represented 7.5 times cover for short -term (ST) debt based on the original maturity concept.
For January to June 2021, the debt service ratio (DSR) increased to 9.4 percent from 8.4 percent a year ago due to higher payments. The DSR, which relates principal and interest payments (debt service burden or DSB) to exports of goods and receipts from services and primary income, is a measure of adequacy of the country's FX earnings to meet maturing obligations.
The country's total outstanding debt (EDT) to GDP ratio remains one of the lowest as compared to other ASEAN member countries.
EDT expressed as a percentage of GDP is a solvency indicator. The low EDT to GDP ratio indicates the country's sustained strong position to service foreign borrowings in the medium to long-term (MLT).
External Debt
External debt, meanwhile, stood at US$101.2 billion at end-June this year, a US$4.1 billion (or 4.3 percent) rise from the US$97.0 billion recorded a quarter earlier.
The rise in external debt was due to net availments of US$3.8 billion, largely attributed to the National Government (NG) as it raised: (a) US$3.0 billion from the issuance of Euro-denominated global bonds and Samurai bonds; and (b) US$1.3 billion from multilateral and bilateral creditors to fund the NG's general financing requirements and COVID-19 pandemic response programs/projects.
Prior periods' adjustments of US$977 million further contributed to the increase of the debt stock. Resident investments in Philippine debt papers issued offshore of US$686 million partly mitigated the rise in the debt level.
Year-on-year, the country's debt stock rose by US$13.7 billion brought about by: (a) net availments of US$14.4 billion, mainly by the NG and private non-banks; and (b) positive FX revaluation of...
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