RP’s foreign debt drops to $54.8B

The country’s external debt dropped by 4.44 percent to $54.8 billion as of end-December last year from $57.4 billion in the same period a year earlier as both private and public sector borrowers paid off some of their maturing obligations, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

On a quarterly basis, external debt fell by 1.4 percent from $55.6 billion in September last year.

BSP Governor Rafael B. Buenaventura said that the debt stock remained heavily biased towards medium to long-term accounts which represented about 91 percent of total debt stock. These loans have a weighted average maturity of 17 years.

Buenaventura said public sector loans had an even longer average maturity of 20 years compared to 11 years average for private sector external debt.

The BSP reported that public sector accounts represented about $37.9 billion or 69 percent of the total debt stock with the National Government and the National Power Corp. (Napocor) accounting for 67.5 percent and 10.9 percent, respectively.

The government will take on about P200 billion of Napocor’s debts totaling some P500 billion as the power firm prepares to attract buyers for its generating and transmission assets.

Private sector debt stood at $16.9 billion, about a fifth of which are liabilities of banks, the BSP said.

On the other hand, the BSP reported that the country’s creditor profile remained diversified. Official creditors accounted for 46 percent of the total, foreign holders of bonds and notes accounted for 28.9 percent and other financial institutions accounted for 20.4 percent.

In terms of currency mix, the BSP reported that the country’s external debt remained dollar-denominated. Dollar loans accounted for 51.2 percent while 30 percent was in Japanese yen.

The BSP said public sector transactions funded the government’s various social and infrastructure projects as well as the relending facilities of government banks.

On the other hand, private sector transactions mostly involved projects in the power, transportation and communication sectors as well as banks’ Tier 2 capital.

During the period, Buenaventura said both public and private sectors recorded net repayments where principal payments exceeded loan availments.

"These negated the large upward foreign exchange revaluation adjustments in December brought about by the weakening of the dollar," Buenaventura explained.

Buenaventura said the continuing acquisition of Philippine global debt papers by Philippine investors also caused further reduction of the total debt stock.