The Philippines under the leadership of Pres. Rody Duterte made some significant achievements in terms of the country’s debt servicing as of end-June 2017 because the outstanding external debt of the Philippines is now down by 6.7 percent or $5.2 billion year-on-year to $72.5 billion partly due to loan payments.
The positive reports of the country’s debt obligations was released to the media by Bangko Sentral ng Pilipinas (BSP) Officer-in-Charge Diwa C. Gunigundo.
On a quarter-on-quarter basis, external debt declined by 1.8 percent or $1.3 billion from $73.8 billion end-March.
In an official statement released by the BSP they said “all key external debt indicators remained at comfortable levels during the second quarter.” External debt is equivalent to 23.5 percent of GDP compared to the previous year’s 26.2 percent.
BSP noted that the external debt ratio which is a solvency indicator, also improved to 19.5 percent of annual aggregate output from 21.7 percent last year.
External debt includes all types of borrowings by residents from non-residents. It is the outstanding amount of actual current, and not contingent, liabilities that require payments of interest and/or principal at maturity.
The BSP Official also stated that the debt stock declined year-on-year because of the following: from a $2.7-billion net principal repayments by both the public and private sectors during the period; and previous periods’ adjustments which was a negative $1.4 billion due to late reporting.
Gunigundo said foreign debt also decreased on a stronger US dollar versus other currencies including the peso and the yen. The BSP Officer-in-Charge said that the country’s hefty gross international reserves represents 5.66 times cover for short-term debt under the original maturity concept.
Source: Manila Bulletin