Foreign debt down 0.4% at end-June

OUTSTANDING foreign debt declined at the end of June as companies and the national government paid down their obligations, the Bangko Sentral ng Pilipinas (BSP) said.
External debt was $72.2 billion at the end of the first half, down 0.4% from a year earlier.
The total was also down 1.4% compared with the end-March level of $73.2 billion.
Outstanding external debt combines all foreign currency-denominated borrowing from foreigners by Filipino individuals and companies and the national government.
The central bank said on Friday that the government and companies paid down $2.4 billion worth of overseas liabilities, consisting mainly of private-sector short-term bank liabilities.
Net principal repayments amounting to $246 million and the decline in foreign investments in local debt instruments totalling $309million further contributed to the decline in the external debt stock, the BSP added.
In terms of currency mix, some 61.5% of the overseas borrowing was in dollars, with 12.9% in yen.
Debt as a share of the economy dropped to 22.5% from 23.5% a year earlier, sustaining a decline over the past two years.
The economy grew 6% in the second quarter, and 6.3% in the first half, well below the government’s 7-8% target band for this year.
“The country’s level of external debt has continued to decline in recent years,” the BSP said. “[This] may be attributed to prudent debt management ans Philippine corporate borrowers’ deleveraging… in order to minimize [foreign exchange] risk.”
Gross international reserves totaled $77.5 billion at the end of June, equivalent to 6.4 times the country’s short-term liabilities.
Some 83.2% of the debt had medium to long-term maturities averaging 17.1 years.
Government borrowing was $38 billion at the end of June, up from $37.5 billion a year earlier.
Debt held by private firms was $34.2 billion, down from $35 billion a year earier.
Loans issued by multilateral and bilateral creditors were little changed at $23.9 billion, accounting for 33.1% of total outstanding debt.
The government plans to borrow P888.23 billlion this year from domestic and foreign sources. — Karl Angelo N. Vidal