The country’s debt to foreign lenders grew in the first half from that of a year ago as the government and private entities tapped more loans to fund their expenditure and investment requirements.
Data from the Bangko Sentral ng Pilipinas showed that, as of end-June, the collective debt of Philippine government entities and private firms amounted to $61.4 billion. The debt, denominated in foreign currencies, was up 7 percent from the $4.2 billion seen in the same period last year.
The BSP said in a report that the increase in the country’s external debt was due to the appreciation of foreign currencies against the US dollar.
An appreciation of other foreign currencies against the greenback raises the dollar value of the Philippines’ external debt.
While the country’s foreign debt rose, its ability to service these obligations also improved, the BSP said. This is because the rate of growth of the country’s output and the rise in its foreign exchange reserves were faster than the increase of its external liabilities.
Data from the BSP showed that growth of the country’s reserves outpaced its obligations denominated in foreign currencies. The reserves of $69 billion as of end-June was 9.6 times the country’s external liabilities maturing within the short term—better than the international benchmark of 1 percent.