Forex debt slightly up in 1st half

MANILA, Philippines—The country’s debt denominated in foreign currencies slightly grew in the first half of the year.

Total outstanding debt of private and government entities in the Philippines reached $62.5 billion as of end-June, up by 1.7 percent from the $61.4 billion reported in the same period last year, data from the Bangko Sentral ng Pilipinas showed.

The BSP said firms and government entities were able to raise funds from offshore market at a favorable cost because of positive sentiment on the Philippines.

“The debt stock grew due to net availments and more investments by non-residents in Philippine debt notes, indicating strong and sustained investor confidence in the country,” the BSP said in a report released Friday.

Despite the increase in the absolute amount of external debt, the country’s external debt ratio actually improved during the period. This is because the rise in the country’s economy, measured in terms of gross domestic product, exceeded the rise in its external debt.

In nominal terms, GDP grew by 7.7 percent to P5.04 trillion in the first half from a year ago.

The external debt-to-GDP ratio, or the proportion of the foreign currency-denominated debt to the size of the economy, stood at 26.6 percent by the end of June, an improvement from last year’s 28.8 percent.