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Keisha Ta-Asan - The Philippine Star
March 17, 2025 | 12:00am
A teller displays US dollars at a money exchange market in Nairobi on November 20, 2023.
Simon Maina / AFP
MANILA, Philippines — The country’s foreign debt slipped slightly to $137.63 billion in end-December 2024 after hitting an all-time high of $139.64 billion in September, mainly due to the appreciation of the dollar against other currencies.
Data released by the Bangko Sentral ng Pilipinas (BSP) over the weekend showed that the debt level declined by $2.02 billion in the fourth quarter as the appreciation of the dollar decreased the value of the country’s debt stock by $1.29 billion.
“The dollar strengthened due to improved US economic performance, market perception toward Federal Reserve’s future policy path as well as expectations on the shift in US trade and investment policies under the then incoming administration,” the BSP said.
The same underlying factors may have also triggered non-residents to offload Philippine debt securities, further lowering outstanding external debt by $835.33 million. There were also repayments amounting to $133.51 million.
Year-on-year, the BSP reported a 9.8-percent increase in the external debt level from the end-December 2023 level of $125.39 billion.
“The increase was driven primarily by net availments of $9.61 billion to address liquidity requirements of the public and private sector,” the central bank said.
Net availments from the public sector during the 12-month period reached $5.59 billion while private sector borrowers accumulated $4.03 billion.
Investor preference toward emerging market debt securities for most of 2024 also led to the acquisition of Philippine debt papers by non-residents amounting to $3.37 billion. Prior years’ adjustments of $634.76 million further contributed to the increase in the debt stock.
But the negative forex revaluation of borrowings denominated in other currencies of $1.39 billion mitigated the increase in external debt.
The country’s external debt to gross domestic product (GDP) ratio improved to 29.8 percent as of end-December 2024 from 30.6 percent a quarter ago as the economy grew by 5.2 percent in the fourth quarter and 5.6 percent in the full year.
The maturity profile of the country’s external debt remained predominantly medium and long-term in nature with original maturities longer than one year at 79.7 percent of the total, while short-term accounts with maturities of up to one year comprised the 20.3 percent balance.
BSP data showed that public sector external debt slipped by 1.8 percent to $85.34 billion in end-December 2024 from $86.88 billion in end-September last year.
Majority or 92.9 percent of the public sector obligations were national government borrowings, while the remaining 7.1 percent pertained to loans of government-owned and controlled corporations, government financial institutions and the BSP.
During the fourth quarter last year, private sector debt declined slightly to $52.29 billion from $52.76 billion a quarter ago. Major creditor countries include Japan, Singapore and the Netherlands.
The national government borrows heavily from foreign and domestic creditors to finance the country’s budget deficit as it spends more than what it actually earns.
