Philippines’ outstanding external debt stood at US$81.4 billion

Press Release: Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno announced that the Philippines’ outstanding external debt stood at US$81.4 billion as of end-March 2020, down by US$2.2 billion (or 2.6 percent) from the US$83.6 billion level as of end-December 2019.

The decline in the debt level during the first quarter was due to net repayments of US$4.0 billion largely attributed to the settlement of short-term (ST) maturing obligations by the private sector. This was offset by: (a) the US$1.1 billion increase in non-residents’ investments in Philippine debt papers issued offshore, demonstrating investors’ confidence in the country’s creditworthiness; (b) prior periods’ adjustments of US$580 million; and (c) positive foreign exchange (FX) revaluation adjustments of US$101 million as the US Dollar weakened against the Japanese Yen.

Year-on-year, the country’s debt stock rose by US$990 million. Although net repayments amounted to US$2.2 billion largely by private sector banks ST accounts, this was more than offset by the following: (a) transfer of Philippine debt papers from residents to non-residents (US$2.4 billion); (b) prior periods’ adjustments (US$482 million); and (c) positive FX adjustments (US$266 million).

External debt refers to all types of borrowings by Philippine residents from non-residents, following the residency criterion for international statistics.

External Debt Ratios

The Governor further stated that key external debt indicators remained at prudent levels. Gross International Reserves stood at US$88.9 billion as of end-March 2020 and represented 6.7 times cover for ST debt under the original maturity concept.

The debt service ratio (DSR), which relates principal and interest payments (debt service burden or DSB) to exports of goods and receipts from services and primary income, is a measure of adequacy of the country’s FX earnings to meet maturing obligations. For January to March 2020, the ratio increased to 8.9 percent from 5.7 percent recorded for the same period a year ago due to higher payments. The DSR has consistently remained at single digit levels.

Total outstanding debt (EDT) expressed as a percentage of Gross Domestic Product (GDP) is a solvency indicator. EDT to GDP ratio decreased (an improvement) to 21.4 percent from 22.2 percent a quarter ago. The ratio indicates the country’s sustained strong position to service foreign borrowings in the medium to long-term (MLT).


The country’s EDT to GDP ratio remains one of the lowest as compared to other ASEAN member countries.

Debt Profile

As of end-March 2020, the maturity profile of the country’s external debt remained predominantly MLT in nature [i.e., those with original maturities longer than one (1) year], with share to total at 83.6 percent. On the other hand, ST accounts [or those with original maturities of up to one (1) year] comprised the 16.4 percent balance of debt stock and consisted of bank liabilities, trade credits and others. The weighted average maturity for all MLT accounts slightly increased to 16.9 years, from 16.7 years during the previous quarter, with public sector borrowings having a longer average term of 20.9 years compared to 7.4 years for the private sector. This means that FX requirements for debt payments are well spread out and, thus, more manageable.

Public sector external debt increased to US$45.1 billion from US$42.8 billion in the previous quarter. About US$38.3 billion of public sector obligations were NG borrowings while the remaining US$6.8 billion pertained to loans of government-owned and controlled corporations, government financial institutions and the BSP.

Private sector debt decreased from US$40.8 billion as of end-December 2019 to US$36.3 billion as of end-March 2020, with share to total decreasing from 48.8 percent to 44.6 percent. The recorded drop in private sector borrowings was due largely to net repayments of US$4.9 billion (mostly by banks).

Major creditor countries were: Japan (US$14.9 billion), United States of America (US$3.6 billion), The Netherlands (US$3.3 billion), and United Kingdom (US$3.2 billion).

Loans from official sources [multilateral and bilateral creditors (comprised Japan- US$8.2 billion; China – US$807 million; and Singapore – US$421 million, among others)] had the largest share (33.6 percent) of total outstanding debt, followed by foreign holders of bonds and notes (31.6 percent). Meanwhile, obligations to foreign banks and other financial institutions partake 28.9 percent; and the rest (5.9 percent) were owed to other creditor types (mainly suppliers/exporters).

In terms of currency mix, the country’s debt stock remained largely denominated in US Dollar (55.7 percent) and Japanese Yen (13.4 percent). US dollar-denominated multi-currency loans from the World Bank and ADB represented 17.4 percent. The 13.6 percent balance pertained to 14 other currencies, including the Philippine Peso, Euro and SDR.