PHL end-March foreign debt drops to $59B on revaluation gains — Bangko Sentral

Philippine foreign debt eased by $1.3 billion  or 2.1 percent to $59 billion as of end-March, from $60.3 billion at the end of 2012, largely on revaluation gains from yen-denominated obligations referenced against the US dollar, Bangko Sentral ng Pilipinas said Friday.

 

Year-on-year, Philippine foreign obligations were down by 4.2 percent from $61.6 billion—reflecting around $2 billion in adjustments in foreign exchange valuations and $727 million invested in Philippine debt papers, data showed. 

 

“This resulted from negative foreign exchange revaluation as the US dollar strengthened in the first quarter of the year, particularly against the Japanese yen, which reduced the US dollar value of yen-denominated loans,” Bangko Sentral noted.

 

“Major external debt indicators remained at comfortable levels in the first quarter of 2013,” Bangko Sentral Governor Amando Tetangco Jr. noted in a statement.

 

The ratio of foreign debt-to-gross domestic narrowed down to 22.8 percent from 26.9 percent. The ratio   indicated Philippine solvency and high capacity to repay long-term debt.

 

Foreign reserves of $84 billion as of end-March also gave the Philippines the capacity to cover 8.6 times of external obligations in terms of original maturity.

 

Foreign debt incurred by the public sector declined to $42.9 billion in the first quarter from $45.2 billion as of end-December 2012, reflecting a $1.4 billion of revaluation adjustments on yen-denominated loans and $1.3 billion in net repayment largely of national government debt.

 

The BSP also said total public sector external debt dropped to $42.9 billion in the first quarter this year from $45.2 billion in December last year due to negative foreign exchange revaluation adjustments ($1.4 billion) particularly for debts denominated in Japanese yen; and net repayments ($1.3 billion) mainly by the national government.

 

“A significant drop in national government’s new borrowings from foreign sources, particularly from capital markets, was observed in the first quarter as the government pursued its policy to shift from foreign to domestic sources of funds,” according to Bangko Sentral.

 

However, debts owed by the private sector went up to $16.1 billion from $15.2 billion as $1 billion in new loans were taken to fund new and expansion projects, it added. — VS, GMA News