MANILA, Philippines—The Philippines’ external debt ratio—total foreign debt of the government and private sectors taken as a percentage of the country’s gross domestic product—dropped in the first quarter of the year even though the amount in absolute terms went up, the central bank announced Friday.
The Bangko Sentral ng Pilipinas said in a press statement that the external debt ratio settled at 27.4 percent by the end of the first quarter, better than the 29.5 percent for the same period last year.
In absolute terms, the outstanding external debt by the end of the first quarter amounted to $62.9 billion, up by 3.3 percent from $60.9 billion as of the same period last year.
But despite the increase in the absolute amount of the debt, the debt ratio dropped because the growth of GDP in the first quarter was much faster.
BSP officials said the decline in the debt ratio is an indicator of the country’s improving capability to service its obligations to foreign creditors and should thus be considered by credit rating firms as testament to the country’s creditworthiness.
The Philippines, which is rated one to two notches below investment grade, is pitching for better credit ratings.