BSP: PH external debt remains manageable despite increase

The Bangko Sentral ng Pilipinas (BSP) has affirmed that the Philippines' external debt remains within manageable levels despite a slight increase in the total external debt (EDT) as of June 2024. According to recent data, the country's EDT stood at USD130.18 billion at the end of June, reflecting a 1.2 percent rise from the USD128.69 billion recorded at the end of March 2024.

The BSP attributed this increase primarily to net availments amounting to USD1.50 billion. This includes the national government's successful issuance of USD2.61 billion in Dual Tranche Fixed Rate Global Bonds under its Sustainable Finance Framework, alongside USD611.81 million in borrowings from official creditors.

Additionally, adjustments from previous periods, totaling USD493.28 million due to late reporting, and net acquisitions of Philippine debt securities by non-residents, which amounted to USD238.80 million, also contributed to the rise.

Despite the uptick in the debt stock, the BSP highlighted that the external debt ratio, which is expressed as a percentage of gross domestic product (GDP), remains at a prudent level. It slightly improved to 28.9 percent from 29 percent in the previous quarter. Other key indicators of external debt health are also reported to be favorable.

Gross international reserves (GIR) stood at USD105.19 billion at the end of June, covering short-term debt 3.84 times based on the remaining maturity concept. Moreover, the debt service ratio (DSR), which measures the burden of debt service payments against exports and other income, improved to 9.5 percent from 11.1 percent over the same period last year due to reduced debt service payments in the first half of 2024.

The BSP emphasized that the DSR and the GIR cover for short-term debt are crucial indicators of the country's ability to meet its maturing obligations, reflecting a solid position in managing external debt amidst global economic fluctuations.