PH trims foreign debt to $60.3-B

MANILA, Philippines – The country’s foreign debt stood at $60.3 billion at the end of 2012, a $1.4-billion reduction from the $61.7-billion level in the third quarter, the Bangko Sentral ng Pilipinas (BSP) said yesterday.

In a report, BSP Governor Amando M. Tetangco Jr. attributed the decline largely to negative foreign exchange revaluation adjustments as the dollar recovered particularly against the Japanese yen.

Year-on-year, debt stock fell $104 million or 0.2 percent from the year ago level of $60.4 billion.

The factors that contributed to the lower debt stock were: increased investment by residents in the Philippine debt papers (amounting to $1.4 billion) and negative foreign exchange revaluation adjustment due to the strengthening of the dollar, Tetangco said.

External debt refers to all types of borrowings by Philippine residents from non-resident that are approved by the BSP.

“Major external debt indicators remained at comfortable levels by the close of 2012,” Tetangco said in a statement.

Gross international reserves (GIR) rose to $83.8 billion at end-December 2012, an accumulation of 11.3 percent or $8.5 billion from $75.3 billion in 2011.

The external debt ratio or outstanding external debt as a percentage of aggregate output (gross national income or GNI) indicated sustained improvement from 20.3 percent in 2011 to 18.3 percent in 2012, the BSP said.

Meanwhile, the external debt portfolio remained predominantly medium to long-term in tenor, making up 85.9 percent of total. The use of medium and long-term tenors allows for more manageable levels of debt payments.

Average maturity for the medium to long term is 20.4 years.

Short-term external debt comprised the remaining 14.1 percent debt stock, largely trade credits and inter-bank borrowings.

Public sector borrowings, meanwhile, declined to $45.2 billion in the last three months of the year to $46.7 billion. Private sector external debt slightly increased to $15.2 billion.

The BSP said that the creditor profile remains largely unchanged.

Borrowings from official creditors had the largest share of 42.1 percent. Foreign holders of bonds and notes comprised 36.2 percent of total, followed by foreign banks and other financial institutions at 14.9 percent.

“The rest of the creditors were mainly foreign suppliers and exporters,” the BSP added.

Likewise, the overall balance of payments (BOP) stood at $9.236 billion in 2012, lower by 19 percent from $11.4 billion in 2011. –Ted P. Torres, The Philippine Star