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Philippine External Debt Up Slightly in 3rd Quarter

12.29.2003

Bangko Sentral ng Pilipinas Governor Rafael Buenaventura announced today that the country’s total outstanding external debt approved by/registered with the Bangko Sentral stood at US$56.3 billion as of end-September 2003. The figure represents an increase of US$0.2 billion (or 0.4 percent) from the June 2003 level of US$56.1 billion.

“The increase was largely due to net loan inflows particularly from public sector accounts,” the Governor said. A positive foreign exchange (FX) revaluation adjustment amounting to US$1.3 billion was recorded as most third currencies, particularly the Japanese Yen, appreciated against the U.S. dollar. The upward impact of this development on debt stock was, however, nearly negated by an increase in residents’ holdings of Philippine debt papers. In line with the internationally-accepted residency criterion in the compilation of external debt statistics, these investments are classified as domestic accounts and thus, excluded from external debt figures.

“Disbursements on medium and long-term (MLT) accounts during the quarter reached more than US$1.85 billion with 87 percent pertaining to public sector borrowers,” the Governor continued. “About half were for the National Government’s budgetary requirements while the rest went to various public and private sector projects with the biggest amounts going to power and energy development (20 percent); and transportation, communication and other infrastructure (10 percent).”

The share of MLT accounts (i.e., with maturities longer than one year) to total debt rose further to 89 percent from 88.9 percent in June. The maturity of MLT debt had a weighted average of 17 years, reflecting an improvement from the previous average of 16.7 years. Gross International Reserves of US$16.8 billion as of November 30, 2003 was equivalent to 2.7 times the level of short-term accounts under the original maturity concept and 1.5 times based on the remaining maturity concept.

The investor profile was largely unchanged. Borrowings from official creditors (international financial institutions, foreign governments and their agencies) accounted for 45 percent of total, followed by bond/noteholders at 29 percent, banks and other financial institutions, 18 percent; and the rest, other creditors.

The country’s currency exposure remained largely in two major currencies: the US Dollar (55 percent) and the Japanese Yen (27 percent). The rest pertained to 16 other currencies, with Special Drawing Rights and the Euro, each accounting for around 4 percent of total.

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