PHL external debt ratios remain at prudent levels in the 4th quarter of 2022

External debt (EDT) expressed as a percentage of gross domestic product (GDP) was recorded at 27.5 percent. This reflects an increase from the EDT to GDP ratio of 26.8 percent in the previous quarter and 27.0 percent in end-2021 resulting from public and private sector spending for pandemic recovery measures and sustaining enhanced business and commercial activity. The EDT to GDP ratio of 27.5 percent signals manageable debt levels as well as the sustained capability of the country to service foreign borrowings in the medium- and long-term.

Other key external debt indicators also remained at prudent levels. Gross international reserves stood at US$96.1 billion as of end-2022 and represented 5.8 times cover for short-term (ST) debt based on the original maturity concept.

The debt service ratio (DSR) improved to 6.3 percent in 2022 from 7.5 percent in 2021 due to higher receipts and lower repayments during the 12-month period (January 2022 to December 2022). The DSR, which relates principal and interest payments (debt service burden) to exports of goods and receipts from services and primary income, is a measure of adequacy of the country’s foreign exchange (FX) earnings to meet maturing obligations.


External debt, which refers to all types of borrowings by Philippine residents from non-residents (following the residency criterion for international statistics), stood at US$111.3 billion as of end-2022, up by US$3.4 billion (or 3.1 percent) from the US$107.9 billion level as of end-September 2022.

The rise in the debt stock during the fourth quarter was mainly driven by net availments of US$1.8 billion with the National Government’s (NG) issuance of US$2.0 billion Global Bonds, while private sector banks sought external financing (US$765 million) to support relending activities and to service maturing obligations. Meanwhile, the appreciation of other currencies against the US Dollar increased the US Dollar equivalent of borrowings denominated in other currencies, resulting in an overall positive foreign exchange (FX) revaluation of US$1.5 billion. This FX revaluation, along with prior periods’ adjustments (US$59 million), further contributed to the rise of the debt stock.

Year-on-year, the country’s debt stock increased by US$4.8 billion. This was due to net availments of US$8.4 billion (largely by the NG) and prior periods’ adjustments of US$1.6 billion. These were tempered by the negative FX revaluation of US$2.6 billion and the increase in residents’ investments in Philippine debt papers issued offshore of US$2.6 billion.


As of end-2022, the maturity profile of the country’s external debt remained predominantly medium- and long-term (MLT) in nature [i.e., those with original maturities longer than one (1) year], with share to total at 85.1 percent. The weighted average maturity for all MLT accounts increased to 17.2 years from 16.9 years in the previous quarter, with public sector borrowings having a longer average term of 20.6 years compared to 7.0 years for the private sector. On the other hand, ST accounts [or those with original maturities of up to one (1) year] comprised only 14.9 percent of the outstanding debt stock and consisted of bank liabilities, trade credits and others. This means that FX requirements for debt payments are still well spread out and, thus, manageable.

Of the MLT accounts, 56.5 percent have fixed interest rates, 41.7 percent carry variable coupon rates, and 1.8 percent balance are non-interest bearing.

Public sector external debt rose to US$67.4 billion (or by US$2.6 billion) from US$64.8 billion in the previous quarter. Said increase slightly raised its share to total vis-à-vis private sector external debt from 60.0 percent to 60.6 percent.About US$59.8 billion (88.7 percent) of public sector obligations were NG borrowings, while the remaining US$7.6 billion pertained to loans of government-owned and controlled corporations, government financial institutions and the BSP.

Private sector debt also grew from US$43.1 billion as of end-September 2022 to US$43.9 billion as of end-December 2022, albeit share to total slightly decreasing from 40.0 percent to 39.4 percent. The increase was due largely to net availments of US$354 million, followed by the transfers of Philippine debt papers from residents to non-residents of US$228 million and positive FX revaluation of US$116 million.

Major creditor countries were Japan (US$14.7 billion), United States of America (US$3.5 billion), and United Kingdom (US$3.2 billion).

Loans from official sources (multilateral and bilateral creditors) had the largest share (37.9 percent) out of the total outstanding debt, followed by borrowings in the form of bonds/notes (33.1 percent) and obligations to foreign banks and other financial institutions (22.9 percent); the rest (6.1 percent) were owed to other creditors (mainly suppliers/exporters).

In terms of currency mix, the country’s debt stock remained largely denominated in US Dollar (77.9 percent) and Japanese Yen (8.8 percent) while the 13.3 percent balance pertained to 15 other currencies, including the Euro, Philippine Peso and Special Drawing Rights.


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