PH external debt dipped last year

The Philippines’s external debt dropped for the third straight year in 2013 due to foreign exchange revaluations and increased investments by locals in debt instruments abroad, the central bank reported this week.

The country’s external debt dropped by 0.9 percent to $58.5 billion at the end of 2013, the Bangko Sentral ng Pilipinas (BSP) said in a statement.

External debt refers to all types of borrowings by Philippine residents from abroad.

Relative to gross domestic product (GDP), the country’s external debt improved to 20.5 percent from 24.1 percent the year before, aided by the better-than-expected growth of the Philippine economy.

The country’s GDP expanded by 7.2 percent in 2013, beating the government’s target of 6 to 7 percent.

The BSP said while locals took out more loans in 2013 from the previous year, the value of the country’s external debt declined as the US dollar strengthened against the Yen.

The increased borrowings in 2013 was also offset by higher investments by Philippine residents in dollar-denominated government IOUs and other debt instruments abroad. Paolo G. Montecillo