External debt fell 0.8% Y-o-Y in Q1

The country’s external debt fell in the first quarter of this year, totaling $73.2 billion, or down by $609 million (0.8 percent) from $73.8 billion during the same period last year. The Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla, Jr. said that decline was due to net repayments of nearly $3.4 billion, primarily on the private sector’s short-term (ST) non-trade accounts.

However, the downward impact on the debt stock was partly offset by: (a) previous periods’ adjustments (positive US$1.5 billion) due to late reporting; (b) upward FX revaluation adjustments ($713 million); and (c) transfer of Philippine debt papers from residents to non-residents ($618 million).

Compared to the end-2017 level of $73.1 billion, the Philippines’ outstanding external debt was slightly higher by $98 million or 0.1 percent as of end-March, Espenilla said.

The slight increase in the debt stock during the first quarter was brought about by: (a) favorable foreign exchange (FX) revaluation adjustments ($621 million), due mainly from the weakened US Dollar against the Japanese Yen which pushed the debt stock higher by $655 million (but peso depreciation against the US Dollar decreased the debt level by $144 million); and (b) prior periods’ adjustments ($685 million) due to late reporting.

These upward pressures on the debt stock were partially mitigated by: (a) net principal repayments ($735 million), which resulted mainly from the bullet payments at maturity as well as prepayments by the private sector; and (b) transfer of holdings of Philippine debt papers issued offshore ($472 million) by non-residents to residents.

External debt refers to all types of borrowings by Philippine residents from non-residents, following the residency criterion for international statistics.