By Lee C. Chipongian The country’s external debt service burden increased by 3.42 percent as of end-June to $4.63 billion versus $4.48 billion same time in 2018, based on data from the Bangko Sentral ng Pilipinas (BSP). Principal payments at the end of the first half 2019 dropped to $3.02 billion from $3.14 billion last year, or down 3.82 percent year-on-year. Interest payments, in the meantime, rose by 20.36 percent year-on-year to $1.61 billion from $1.34 billion. The debt service ratio or DSR has consistently remained at single-digit levels, said the BSP. Also, key external debt indicators are still at “prudent levels despite the rise in external debt” as of end-June this year. “The DSR, which relates principal and interest payments (debt service burden) to exports of goods and receipts from services and primary income, is a measure of adequacy of the country’s FX (foreign exchange) earnings to meet maturing obligations,” explained the BSP. As of end-June, the ratio was at 7.5 percent, similar to what was reported in end-June 2018. The external debt ratio, which is a solvency indicator, also indicates the country’s strong position to service foreign borrowings in the medium to long term. The BSP reported over the weekend that as of end-June this year, the country’s total outstanding external debt was up by 12.55 percent year-on-year to $81.259 billion. On a quarter-on-quarter basis, foreign debt increased by one percent. Public sector external debt increased to $42.3 billion as of end-June compared to the previous quarter’s $40.2 billion or end-March. Private sector debt, on the other hand, declined to $39 billion compared to $40.3 billion at end-March.