THE COUNTRY’S foreign debt continued to fall in the first quarter of 2015 as more obligations were repaid, and amid foreign exchange revaluation, data from the Bangko Sentral ng Pilipinas (BSP) showed.
As a result, the amount of money the economy spent on foreign debt payments declined. Relative to the size of the economy, in terms of gross domestic product, the nation’s debt holdings also slipped.
“Key external debt indicators were observed to have remained at very prudent levels in the first quarter of 2015,” BSP Governor Amando M. Tetangco Jr. said in a statement.
External debt stood at $75.3 billion as of the end of March 2015, down by $2.4 billion from $77.7 billion as of the end of 2014. The decline was attributed to net repayments worth $2 billion, mainly by banks.
At the end of March, the country’s external debt declined to 26.1 percent of GDP from 29.1 percent a year ago.
The strengthening of the dollar against other currencies translated to a reduction in the country’s foreign debt by $220 million.
Debt holdings in currencies other than the greenback look smaller because the total is expressed in dollar.
Likewise, an increase in residents’ investments in Philippine debt paper worth $100 million, also contributed to the decline in the debt stock. Investments by Filipinos in foreign debt paper are subtracted from the country’s gross external debt holdings.
External debt refers to all types of borrowings by Filipinos from foreigners, following the residency criterion for international statistics.
The country’s external debt remained heavily biased toward medium- to long-term accounts, which represented 82.6 percent of the total. These are loans that mature in one year or longer. “This means that foreign exchange requirements for debt payments are well spread out and, thus, more manageable,” the BSP said.
Public sector external debt stood at $39.1 billion (or 52.0 percent of total debt stock), slightly lower than the $39.3 billion (50.7 percent) at the end of 2014. Private sector debt, meanwhile, declined to $36.2 billion from $38.3 billion a quarter ago.