External debt down to $77.5B in end-2015

THE COUNTRY’S outstanding external debt slightly declined to $77.5 billion as of the end of last year partly due to a stronger dollar, the Bangko Sentral ng Pilipinas (BSP) said Monday.

The drop in foreign debt stock from $77.7 billion in 2014 was attributed by BSP Governor Amando M. Tetangco Jr.  to higher investments worth $1.8 billion by residents, mostly banks, in locally issued debt paper, on top of negative foreign exchange revaluation adjustments worth $456 million.

“A stronger dollar results in a lower debt figure expressed in US dollar terms,” Tetangco explained, noting that the US dollar strengthened last year on the back of the US economy’s gradual recovery as well as expectations of an interest rate increase by the US Federal Reserve, which eventually happened last December.

The decline in external debt was nonetheless tempered by $2 billion in net availments or excess of drawings over debt payments, as well as previous periods’ audit adjustments, the BSP said.  Ben O. de Vera