Philippines’ external debt hits $128.7 billion amid borrowing surge

The country’s total outstanding external debt as of March 2024 rose 8.3% to $128.692 billion, fueled by heightened borrowings from both the government and private sectors, primarily through bank loans aimed at bolstering liquidity.

Data from the Bangko Sentral ng Pilipinas (BSP) revealed a quarterly uptick of 2.6%, amounting to $3.298 billion. Despite the rise, the external debt ratio (EDT as a percentage of gross domestic product) held steady at 29%, up marginally from 28.7% in Q4 2023.

Year-on-year, the debt stock rose by $9.880 billion, driven largely by net availments totaling $8.9 billion, with private sector entities, particularly banks, accounting for $5.4 billion.

Additional factors contributing to the debt increase included a net acquisition of Philippine debt securities by non-residents totaling $1.5 billion and prior years’ adjustments amounting to $1 billion. However, a negative $1.6 billion foreign exchange revaluation on borrowings denominated in other currencies partially mitigated the overall rise.

Positive investor sentiment spurred a $1.2 billion increase in investments in the Philippines’ debt securities by non-residents during the period, with adjustments from prior periods contributing an additional $551 million to the debt stock.

Despite the US dollar’s appreciation against the peso, which led to a negative FX revaluation on borrowings, the majority of the country’s external debt as of March remained medium to long-term (MLT), representing 86.7% or $111.6 billion. The weighted average maturity for MLT accounts slightly increased to 16.8 years.

Short-term liabilities with original maturities of up to one year amounted to $17.1 billion, constituting 13.3% of the total external debt. These primarily included bank liabilities ($13.1 billion), trade credits ($2.7 billion), and other liabilities ($1.3 billion).

Among MLT accounts, 53.7% ($59.9 billion) carried fixed interest rates, 43.8% ($48.9 billion) had variable rates, and 2.5% ($2.8 billion) were non-interest bearing.

As of March 2024, public sector external debt rose by 1.4% or $1.1 billion to $78.9 billion, with national government borrowings accounting for 91.6%

Subscribe to

Stay in the know with Bilyonaryo’s unparalleled coverage of business news and global industries!

Elevate your understanding of the Philippine business landscape and gain insights into worldwide markets by subscribing to our dedicated channels. Receive breaking news, in-depth analyses, and exclusive interviews with industry leaders directly on Viber, WhatsApp, and Facebook. Stay informed and empowered with our Email Newsletter, delivering curated content right to your inbox.

Don’t miss out on crucial updates and trends shaping economies and businesses both locally and internationally.

Join Bilyonaryo’s community today by clicking the button below to subscribe and stay ahead in the dynamic world of business.

Share this Bilyonaryo story