PH's external debt service down 5.47%

PH's external debt service down 5.47%

Good news for a change!!!

The country’s country’s external debt service burden is down to $3.628 billion as of end-June this year 2018 , or 5.47 percent lower from same time in 2017 of $3.838 billion.

This was brought about by the loan repayments made by the country.

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Data from the Bangko Sentral ng Pilipinas would show that “the principal portion fell by 10.18 percent to $2.338 billion from $2.603 billion. Interest payments, on the other hand, went up by 4.37 percent to $1.290 billion from $1.236 billion same time last year. External debt service burden, part of the the outstanding external debt, represents principal and interest payments but does not include prepayments on future loan maturities.”

As reported earlier by the BSP, the Philippines’ total outstanding external debt amounted to $72.2 billion as of end-June, it decreased by 0.4 percent compared to the same period last year of $72.5 billion on loan repayments and foreign exchange (FX) adjustments.

BSP Governor Nestor A. Espenilla Jr. explains that “external debt continued to be manageable because corporate borrowers are deleveraging from foreign borrowings to lessen their FX risk. The US dollar accounted for 61.5 percent of the country’s debt stock. The greenback has been pummeling the peso to a 13-year low of P54 amid global trade conflict and rising US interest rates.”

For the first half of the year total net principal repayments amounted to $2.4 Billion, one of the factors that led to the decline of our foreign debt.

Espenilla said “external debt indicators improved during the April to June period. During this time, the BSP has FX reserves of $77.5 billion.”

The debt service ratio (DSR), relates to the principal and interest payments or debt service burden to exports of goods and receipts from services and primary income, stood at 6.1 percent as of end-June. The numbers is an improvement from  7.8 percent last March and 6.7 of June of 2017 said Espenilla, which translates to FX earnings continue to be adequate to meet maturing loans.

“The DSR has consistently remained at single digit levels, and well below the international benchmark range of 20 to 25 percent,” said the BSP.

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Report from Manila Bulletin

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