FOREIGN DEBT SWELLED TO $59.8 BILLION IN SEPTEMBER
 

MANILA, DECEMBER 31, 2010 (MANILA STANDARD TODAY) by Roderick T. dela Cruz - The country’s foreign debt swelled 9.2 percent year-on-year to $59.8 billion at the end of September, but the good news is that the Philippines has enough foreign exchange hoard to fully cover the foreign obligations, Bangko Sentral said Wednesday.

Bangko Sentral Gov. Amando Tetangco Jr. said the gross international reserves of nearly $61 billion as of November “can already fully cover total outstanding external debt of $59.8 billion that have been approved or registered by Bangko Sentral as of the end of the third quarter of 2010.”

Bangko Sentral earlier reported that its gross international reserves hit a record high of $61.3 billion at the end of November as a result of a strong balance of payments surplus of $13.2 billion in the first 11 months of the year.

External debt refers to all types of borrowings by the government and the private sector from other countries.

Tetangco noted that the external debt level as of end-September was up $2.5 billion or 4.4 percent from $57.3 billion at the end of the second quarter.

Public sector external debt rose $2.2 billion to $46.4 billion in the third quarter from $44.2 billion in the second quarter while private sector external debt grew $344 million to $13.4 billion.

About 44.9 percent of the debt came from official creditors that include multilateral institutions and bilateral creditors while 36 percent represented debt to foreign holders of bonds and notes. Other lenders were foreign banks and other financial institutions, as well as foreign suppliers or exporters.

US dollar-denominated accounts comprised 48.5 percent of the total foreign debt; yen, 29.1 percent; multi-currency loans from the Asian Development Bank and the World Bank, 10.6 percent; and the rest in 18 other international currencies.

The growth of external debt on a quarterly basis was traced to the weakening of the US dollar against major currencies in which the country’s debt stock is denominated, such as the Japanese yen. This increased the outstanding debt in US dollar terms by more than $1.5 billion.


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