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Maturity Profile of Philippine External Debt Remained Favorable in the 2nd Quarter

09.19.2002

Bangko Sentral ng Pilipinas Officer-in-Charge Amando Tetangco, Jr. announced today that the country’s total outstanding external debt approved by/registered with the Bangko Sentral amounted to US$54.9 billion as of end-June 2002. The level reflects a US$1.5 billion or 2.7 percent increase over the previous quarter’s US$53.4 billion due exclusively to the over US$2 billion in upward foreign exchange revaluation (FXR) adjustments on third currency-denominated debt resulting from the continuing depreciation of the U.S. dollar against third currencies. Mr. Tetangco said that, “Without these revaluation adjustments, total external debt would have gone down by US$547 million as the country actually had a net repayment of US$227 million on its foreign loans. At the same time, residents’ holdings of Philippine debt papers issued offshore went up by US$379 million, correspondingly also reducing external debt.”

More than half of loan disbursements during the period (53.4 percent) went into transportation, communication and other infrastructure projects while 26 percent were for reserve management purposes. The rest went into various government and private sector projects in areas such as power and energy development, education, agriculture and others.

Notwithstanding substantial upward FXR adjustments, the share of public sector debt to total debt stock declined slightly to 65 percent, from 65.4 percent in the previous quarter due to net borrowings by private banks totaling US$0.5 billion.

Mr. Tetangco also reported that the maturity profile of the country’s external debt remained favorable with 89.4 percent of the total representing medium- and long-term (MLT) maturities and only 10.6 percent representing short-term accounts. MLT accounts had a weighted average maturity of 16.2 years, a slight improvement from the first quarter average of 16.1 years. Gross International Reserves (GIR) as of end-June represented 2.9 times the level of short-term accounts.

By type of creditor, the share of official creditors (international financial institutions, foreign governments and their agencies) to total increased from 44 percent to 45 percent due to revaluation adjustments while that of foreign holders of bonds, notes and certificates of deposits declined from 28 percent to 27 percent. Banks and other financial institutions provided 23 percent of total debt outstanding.

The debt stock remained largely denominated in two major currencies with U.S. dollar accounts representing 56 percent and Japanese Yen accounts representing 25 percent. The rest pertained to 15 other currencies with credits denominated in Special Drawing Rights and in Euro accounting for 5 percent and 3 percent, respectively.

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