PHL’s external debt ratios remain at prudent levels in the Q3 of 2021

Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno announced that the Philippines’ outstanding external debt remained at a prudent level as its ratio to Gross Domestic Product (GDP) recorded at 27.3 percent at end-September 2021.

The Governor further stated that other key external debt indicators also remained at prudent levels. Gross International Reserves (GIR) stood at US$106.6 billion as of end-September 2021 and represented 8.6 times cover for short -term (ST) debt based on the original maturity concept.

For January to September 2021, the debt service ratio (DSR) increased to 8.1 percent from 7.2 percent recorded for the same period a year ago due to higher payments. The 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.

The country’s total outstanding external debt (EDT) to GDP ratio remains one of the lowest as compared to other ASEAN member countries.

EDT expressed as a percentage of GDP is a solvency indicator. The low EDT to GDP ratio indicates the country’s sustained strong position to service foreign borrowings in the medium to long-term (MLT).


External debt, meanwhile, stood at US$105.9 billion as of end-September this year, a US$4.7 billion (or 4.7 percent) rise from the US$101.2 billion recorded a quarter earlier.

The rise in the debt level during the third quarter of 2021 was due largely to net availments of US$5.7 billion, mainly attributed to the National Government (NG) as it raised US$3.0 billion from the issuance of global bonds and US$1.3 billion from official sources to fund its general financing requirements and COVID-19 pandemic response programs/projects.

Moreover, in view of the recent distribution by the International Monetary Fund of the US$650 billion SDR allocation to its members last 23 August 2021, the country’s reserve assets and external debt levels increased by US$2.8 billion or SDR2.0 billion (share of the Philippines) during the quarter.

Prior periods’ adjustments of US$573 million further contributed to the increase of the debt stock. Meanwhile, resident investments in Philippine debt papers issued offshore of US$992 million and negative foreign exchange revaluation of US$556 million partly tempered the rise in the debt level.

Year-on-year, the country’s debt stock rose by US$14.0 billion brought about by: (a) net availments of US$14.3 billion, mainly by the NG; and (b) prior periods’ adjustments of US$2.3 billion. The increase in the debt level was partly tempered by the: (a) transfer of Philippine debt papers from non-residents to residents of US$1.7 billion; and (b) negative FX revaluation of US$987 million.

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


As of end-September 2021, 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 88.3 percent. On the other hand, ST accounts [or those with original maturities of up to one (1) year] comprised the 11.7 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 17.2 years, with public sector borrowings having a longer average term of 20.8 years compared to 7.3 years for the private sector. This means that FX requirements for debt payments are still well spread out and, thus, manageable.

Public sector external debt increased to US$65.2 billion from US$59.9 billion in the previous quarter. About US$56.9 billion of public sector obligations were NG borrowings while the remaining US$8.4 billion pertained to loans of government-owned and controlled corporations, government financial institutions and the BSP.

Private sector debt decreased from US$41.3 billion as of end-June 2021 to US$40.7 billion as of end-September 2021, with share to total likewise decreasing from 40.8 percent to 38.4 percent. The decline was due to the: (a) increase  in resident investments in Philippine debt papers issued offshore (US$586 million); (b) net repayments (US$434 million); and (c) negative FX revaluation (US$121 million). These were partially offset by prior periods’ adjustments (US$572 million).

Major creditor countries were: Japan (US$14.8 billion), United States of America (US$2.9 billion), The Netherlands (US$2.8 billion), United Kingdom (US$2.4 billion), and China (US$2.2 billion). Creditor mix continues to be well-diversified.

Borrowings in the form of bonds/notes had the largest share (37.7 percent) of total outstanding debt, followed by loans from official sources [multilateral andbilateral creditors (comprised of Japan – US$8.9 billion; China – US$1.4 billion; and France -US$701 million, among others) – 37.3 percent], and obligations to foreign banks and other financial institutions (19.2 percent); the rest (5.7 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 (54.9 percent) and   Japanese   Yen (10.1 percent). US Dollar-denominated multi-currency loans from the World Bank and ADB represented 19.4 percent. The 15.6 percent balance pertained to 14 other currencies, including the Euro, Philippine Peso and SDR.