MANILA, Phililppines --- The Bangko Sentral ng Pilipinas (BSP) yesterday said the country's external debt increased by 3.2 percent or by $2 billion year-on-year to $62.9 billion as of the end of the first quarter.
The current debt stock is equivalent to 27.4 percent of gross domestic product (GDP), lower than the previous year's 29.5 percent.
BSP Governor-in-Charge Deputy Governor Juan de Zuniga Jr. in a statement said that compared to the end of 2011, external debt rose by 1.9 percent or by $1.2 billion because of net availments - or the excess borrowings over repayments - during the period of $2.3 billion resulting from "escalated" and "upbeat business sentiment" both from the government and private sectors.
Based on BSP data, the principal debt service ratio during the quarter stood at eight percent, lower than March 2011's 8.2 percent.
The ratio improved because of an increase in the country's export shipments despite the slack in demand from recovering economies such as the US and Eurozone. The external debt service ratio is the ratio of total principal and interest payments relative to total exports of goods and services. It is also a measure of the country's foreign exchange strength to meet obligations.
In a statement, the BSP said the external debt portfolio remained predominantly medium to long-term in tenor or 88.2 percent of total debt, which implied more manageable debt payments.
Medium to long-term or MLT loans are those with maturities longer than one year, with a weighted average maturity of 22.3 years. Public sector borrowings had a longer average tenor of 24.2 years, compared to 10.9 years for the private sector.
On the other hand, the BSP said short term external debt accounted for 11.8 percent and these are mostly trade credits and inter-bank borrowings.
Based on BSP data, total public sector external debt increased to $48.3 billion in the first three months because of net availments amounting to $1.6 billion. These are mostly National Government borrowings to fund expenditures.
Private sector external debt in the meantime rose to $14.6 billion as higher trade credits were registered by non-banks and bond issuances by local banks for general funding requirements.
The country's creditor profile remains the same as official creditors - these are multilateral and bilateral agencies with concessional loans - accounted for 42.5 percent of total debt.
Foreign holders of bonds and notes accounted for 38.5 percent while foreign banks and other financial institutions contributed 12.3 percent. The rest of the creditors or 6.7 percent were mainly foreign suppliers/ exporters.
BSP said 49.5 percent of the foreign debt currency composition is in US dollars, 25.1 percent in Japanese Yen accounts accounted for 25.1 percent, and 11.6 percent in multi-currency loans from the Asian Development Bank and the World Bank. About 13.8 percent of other loans are in 18 other currencies.
External debt refers to all types of borrowings by Philippine residents from non-residents that are approved and registered by the central bank.