Debt service burden up 17% to $13B

THE country’s debt service burden rose by 16.8 percent to $12.85 billion as of the end of September from $11 billion a year earlier, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.

Principal payments picked up by 16.8 percent to $6.93 billion from $5.93 billion, while interest payments also rose by 16.8 percent to $5.93 billion from $5.07 billion.

The debt service burden includes principal and interest payments on medium- to long-term credits like those from the International Monetary Fund, loans subject to Paris Club agreements, and debt restructuring by commercial banks, as well as new money facilities.

It also includes interest payments on banks’ and non-banks’ fixed and revolving short-term liabilities, but not prepayments on future years’ maturities of foreign loans and principal payments on fixed and revolving short-term liabilities.

The BSP earlier reported that the country’s outstanding external debt totaled $139.64 billion in the July-September period, up from $130.18 billion as of end-June.

It asserted that the country’s external debt ratios stayed at manageable levels as of the third quarter despite additional borrowings.

Broken down, $86.88 billion of the amount was owed by the public sector, up 17.8 percent from the $73.7 billion recorded in the same period in 2023.

Private-sector debt amounted to $52.76 billion, 16.9 percent higher than the $45.13 billion reported at the end of September last year.

As a percentage of gross domestic product (GDP), the debt service burden rose to 3.9 percent as of the third quarter from 3.5 percent a year earlier.

External debt, meanwhile, was equivalent to 30.6 percent from 28.9 percent in the second quarter.