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Tuesday, December 27, 2005
RP’s 3rd quarter debts lower by 1% from June level: BSP
The country’s outstanding external debt approved by the Bangko Sentral ng Pilipinas (BSP) stood at $55.5 billion at the close of September, down one percent from the $56 billion level in June 2005.
On a year-on-year basis, debt stock declined by $130 million or 0.2 percent from the $55.6 billion level.
The country’s external debt ratio, or total outstanding external debt as a percentage of aggregate output or gross national product, was estimated at 55.5 percent as of September, an improvement of 4.8 percentage points over the 60.3 percent level a year ago.
This reflected the strengthened position of the country to pay maturing foreign obligations on a continuing basis.
The country’s debt service ratio, or total principal and interest payments as a percentage of total exports of goods and receipts from services and income, was estimated at 14.1 percent as of the end of the third quarter, reflecting an improvement from the 14.7 percent level a year ago.
Sufficient
The ratio is well below the 20 percent international benchmark, indicating that the country has sufficient foreign exchange earnings to meet current maturities of foreign obligations.
The decline in debt stock during the third quarter resulted largely from negative foreign exchange revaluation adjustment as the US dollar strengthened vis-à-vis the Japanese yen, as well as from the increase in residents’ investments in Philippine debt papers.
The maturity profile of the debt stock remained favorable, with medium- to long-term accounts representing 89 percent of the total.
These loans, with original tenors of more than one year, had a weighted average maturity of 17.4 years.
Public sector borrowings had a longer average term of almost 20 years, compared to 10.5 years for the private sector.
The gross international reserves of $18.1 billion as of end-November represented 2.9 times the level of short-term debt under the original maturity concept, and 1.7 times of short-term debt based on the remaining maturity concept.
Short-term accounts under the remaining maturity concept consist of loans with original maturities of one year or less plus amortizations on medium and long-term accounts falling due within the next 12 months from the reference period, in this case, September.
External liabilities of the public sector represented 67.9 percent of total, with the balance pertaining to the private sector.
A moderate yet steady decline of public sector share to total external debt has been observed during the past four quarters, from 69.1 percent in December 2004 to 68.6 percent in March 2005 and 68.2 percent in June.
Investor base
Meanwhile, the country’s continuing access to a wide investor base was evident in the diversified creditor profile of outstanding liabilities.
Official creditors (consisting of multilateral and bilateral institutions) accounted for 40.4 percent of the total, followed by foreign holders of bonds and notes at 32.1 percent, and foreign banks and other financial institutions, 22.0 percent.
The rest of the creditors (5.5 percent) were mostly suppliers.
Gross disbursements on medium- and long-term accounts during the third quarter reached more than $1.7 billion, pertaining mainly to the public sector to partially cover payments on foreign currency obligations as well as to fund infrastructure and social services projects.
Disbursements on private sector accounts were used for transportation, communications and power generation projects. (PR)
(December 27, 2005 issue)
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