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Philippine External Debt Recorded at US$56.7 Billion in March

06.25.2004

Bangko Sentral Governor Rafael Buenaventura announced today that as of March 31, 2004, the country’s outstanding external debt approved/registered by the Bangko Sentral stood at US$56.7 billion, reflecting a US$0.7 billion or 1.2 percent decline from the previously reported end-2003 level of US$57.4 billion. On an annual basis, external debt grew by US$1.2 billion or 2.1 percent from the US$55.5 billion figure for end-March 2003.

“Debt with medium to long-term (MLT) maturities continued to account for the bulk of the debt stock at 86.8 percent”, the Governor continued. These loans have a weighted average maturity of 17.3 years in March, from 17.2 years in December reflecting sustained and collaborative efforts of government agencies to lengthen the maturity of new borrowings. MLT public sector accounts had an average maturity of 19.5 years while private sector loans had an average maturity of 11.2 years.

Gross International Reserves of US$16.5 billion as of end-May 2004 represented 2.2 times the level of short-term accounts under the original maturity concept and 1.3 times based on the remaining maturity concept.

The country’s creditor profile remained diversified with official creditors accounting for 45.2 percent of total, followed by foreign holders of bonds and notes at 27.2 percent, and banks and other financial institutions with 20.2 percent.

In terms of currency mix, the country’s external debt remained largely denominated in two currencies: the US Dollar (51.2 percent) and the Japanese Yen (28.6 percent). The rest were in 16 other currencies with the Euro representing 6.9 percent and Special Drawing Rights, 3.6 percent.

Gross disbursements on MLT accounts amounted to more than US$2.5 billion, pertaining largely (96.8 percent) to public sector borrowings. The Government’s budgetary requirements represented 71.3 percent, loans for infrastructure projects - 18.3 percent, and borrowings of government banks for re-lending - 7.2 percent. The balance of 3.2 percent pertained to private sector loans to finance projects in the power, transportation and communication sectors.

While net inflows of more than US$1.3 billion from external debt transactions were realized during the first quarter, the debt stock declined due to availability of more data on residents’ holdings of Philippine debt papers which increased by more than US$2 billion to US$9.076 billion.

In an effort to further improve its database on external debt, the Bangko Sentral expanded the coverage of its survey of resident holdings of Philippine debt papers to include amounts held by the Trust Departments of commercial banks for the account of residents. Pursuant to international practice, said holdings which represent resident-to-resident accounts are excluded from the coverage of external debt. The revision had the effect of reducing the March 2004 external debt stock by US$1.946 billion. Without the revision, external debt rose by US$1.269 billion during the first quarter.

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