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Philippine External Debt Drops By $0.25 Billion in June

09.29.2000

The Bangko Sentral announced today that as of June 30, 2000, the country’s outstanding external debt approved/registered with the Bangko Sentral stood at US$52.164 billion. The figure reflects a US$0.251 billion drop from the end-March level of US$52.415 billion, and arose from net repayments on loans and increased investments by residents in debt instruments issued by Philippine borrowers outside the country.

 The maturity structure of foreign obligations remained favorable with medium- and long-term (MLT) accounts (or those payable over a period of more than one year) comprising 89 percent of the total outstanding. Average tenor of MLT accounts is about 17.3 years. Bangko Sentral records show that the country’s external position continues to be comfortable with gross international reserves (US$15.4 billion) of more than 2.6 times the level of short-term (ST) liabilities (US$5.9 billion).

A slight shift in the sectoral breakdown by borrower was also noted during the three-month period. Private sector share to total external debt rose from 32 percent in March to 33 percent by end-June, with public sector obligations showing a corresponding decline. Average maturity of public sector accounts further lengthened from 20.2 years to 20.3 years. A similar trend was observed for private sector accounts, with average tenor improving from 9.4 years in March to 9.6 years in June.

The Bangko Sentral further reported that about 2.5 percent of MLT accounts were non-interest bearing. For loans with fixed interest (which represented about 57 percent of total MLT debt), average rate was approximately 6 percent, while those with floating interest showed an average spread of 125 basis points over base rate. Cost of ST borrowing was estimated at about 6.1 percent. Average US Dollar LIBOR during the quarter ranged from 6.3 - 6.79 percent for 3-month funds and from 6.52 - 6.97 percent for 6-month funds.

As in the previous quarter, half of outstanding debt were owed to official creditors (international financial institutions, foreign governments and their credit/export agencies) and, thus, obtained generally at softer terms compared with other obligations. Borrowings in the form of debt instruments (bonds, notes and certificates of deposits) accounted for a quarter of the total, with the balance pertaining to banks, suppliers and other creditors. 

In terms of currency mix, 54 percent of total debt were denominated in US Dollar and 27 percent in Japanese Yen.

 The country’s debt service burden (principal and interest payments on external debt) remained manageable at about 13.7 percent of the value of exports of goods and services during the first half of the year.

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