Phl external debt up 9.3% to $59.8 B

MANILA, Philippines – The foreign currency denominated debt of the Philippines went up by 9.3 percent in the first nine months of last year but the country’s debt service capacity remained comfortable, the Bangko Sentral ng Pilipinas (BSP) said over the weekend.

BSP Governor Amando M. Tetangco Jr. reported that the country’s external debt reached $59.8 billion as of end-September last year or $5.1 billion higher than the $54.7 billion registered as of end-September 2009.

External debt refers to all types of borrowings by the Philippine residents from non-residents that were approved or registered by the BSP.

Total public sector external debt accounted for about 75 percent of the country’s total foreign currency denominated debt while the external debt of private corporations cornered the remaining 25 percent.

Data showed that US dollar-denominated accounts cornered more than 50 percent of the country’s total external debt followed by the Japanese yen with about 28 percent while multi-currency loans from international lenders including the Asian Development Bank (ADB), the World Bank, among others accounted for more than 10 percent.

Despite the increase in the country’s external debt, Tetangco said the debt service ratio improved to 7.9 percent in end-September last year from 8.7 percent in end-September of 2009.

“The country’s debt service capacity also remained comfortable,” the BSP chief stressed.

In 2009, the country’s outstanding external debt slipped by 1.1 percent to $53.3 billion or 33.1 percent of gross domestic product (GDP) from $53.9 billion or 32.1 percent of GDP registered in 2008.

The country’s external debt to GDP ratio peaked in 1986 at 97.7 percent of GDP but has generally been on a downtrend since 2003 when it reached 72.1 percent down to 32.3 percent in 2008 before picking up slightly to 33 percent in 2009

The country’s GDP posted a surprising growth of 7.5 percent in the first three quarters of last year from 0.7 percent in the same period in 2009.

Economic managers through the Cabinet-level Development Budget Coordination Committee (DBCC) revised the country’s GDP growth target last year to five percent to six percent instead of 2.6 percent to 3.6 percent.

This year, the country’s domestic output as measured by the GDP is expected to post a faster growth of about seven percent to eight percent. –Lawrence Agcaoili (The Philippine Star)