remain at comfortable levels.
The gross international reserves (GIR), a measure of the country’s ability to settle import payments and service foreign debt, amounted to $104.1 billion as of March 2024. This represents a 3.8 times cover for short-term debt based on the remaining maturity concept.
Factors Behind the Debt Increase
The rise in the debt level was attributed to net availments of $2.5 billion by local entities, primarily private sector banks, which raised $2.1 billion from offshore creditors for general corporate expenditures, refinancing of borrowings, and liquidity purposes. Additionally, public sector entities secured $331 million in net availments to fund various projects and programs, including those aimed at enhancing tax system efficiency and promoting digital technology adoption.
Positive investor sentiment also played a role, with investments in Philippine debt securities by non-residents increasing by $1.2 billion. Prior periods’ adjustments further added $551 million to the debt level, although this was partially offset by a $927 million foreign exchange revaluation of borrowings denominated in other currencies amid US dollar appreciation.
Debt Composition
As of the end of March 2024, 86.7% ($111.6 billion) of the country’s external debt had a medium and long-term maturity profile. Public sector external debt stood at $78.9 billion, accounting for 61.3% of the total, while private sector debt totaled $49.8 billion, representing 38.7% of the total. The increase in private sector debt was mainly due to bond issuances by local private banks amounting to $1.8 billion.
Major Creditors and Currency Mix
The major creditor countries to the Philippines were Japan ($15.2 billion), the United Kingdom ($4.6 billion), and the Netherlands ($3.9 billion). Loans from official sources, including multilateral ($34.8 billion) and bilateral creditors ($15.9 billion), accounted for 39.4% of the total outstanding foreign debt. Borrowings in the form of bonds/notes amounted to $42.2 billion, while obligations to foreign banks and other financial institutions totaled $28.5 billion. The remaining $7.3 billion was owed to other creditors, mainly suppliers or exporters.
In terms of currency mix, 76% ($97.8 billion) of the country’s foreign debt was denominated in US dollars, and 8.6% ($11.1 billion) in Japanese yen. The remaining 15.4% ($19.8 billion) was spread across 17 other currencies, including the Philippine peso ($9.3 billion), the euro ($5.9 billion), and Special Drawing Rights ($3.8 billion).
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