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Maturity Profile of External Debt Further Improved in 4th Quarter

03.27.2003

Bangko Sentral ng Pilipinas Officer-In-Charge Amando M. Tetangco, Jr. announced today that the country’s total outstanding external debt approved by/registered with the Bangko Sentral stood at US$53.9 billion as of end-December 2002, up by US$0.3 billion or 0.5 percent from the previous quarter’s US$53.6 billion.

The slight increase resulted essentially from foreign exchange revaluation (FXR) adjustments on non-US dollar denominated debt of US$0.5 billion due to the strengthening of third currencies, principally the Yen, against the US dollar. This was partly offset by the US$0.3 billion increase to US$6.0 billion in Philippine residents’ investments in Philippine debt papers issued in the international capital markets. Such investments are not included in the country’s external debt.

Mr. Tetangco pointed to the further improvement in the maturity profile of the country’s external debt. “As of end-2002, close to 90 percent of our external debt had medium-to long-term (MLT) maturities and only 10 percent had short-term (ST) maturities,” he said. The weighted average maturity of MLT debt also improved to 16.5 years from 16.4 years in September. Gross International Reserves (GIR) remained adequate which, at US$16.2 billion at year-end, were equivalent to 2.9 times the level of ST accounts based on the original maturity concept and 1.5 times based on the current maturity concept (original ST maturities plus amortizations on MLT debt due during the next 12 months).

By borrower, public sector debt increased by US$0.9 billion and accounted for 66 percent of total debt stock from 65 percent in the previous quarter. Private sector credits accounted for the 34 percent balance, owed mainly by entities in the telecommunication and power sectors.

The creditor profile of the country’s external debt remained diversified with official creditors (international financial institutions, foreign governments and their agencies) accounting for the biggest share of 46 percent of total, followed by foreign holders of bonds and notes (27 percent), and banks and other financial institutions (22 percent).

In terms of currency mix, US dollar-denominated debt accounted for 55 percent of total and Japanese Yen debt, 27 percent. The rest pertained to 16 other currencies with credits denominated in Special Drawing Rights and in Euro accounting for a combined share of 9 percent.

On an annual basis, the external debt rose by US$1.5 billion or 2.9% from US$52.4 billion at end-2001 also due mainly to positive FXR adjustments (US$2.1 billion) which exceeded the US$1.1 billion increase in residents’ investments in Philippine debt papers floated offshore.

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