The country’s external debt service burden rose by 21.6 percent to $5.93 billion as of end-July from $4.88 billion in the same time in 2020, based on Bangko Sentral ng Pilipinas (BSP) data.
External debt principal payments increased by 37.39 percent year-on-year to $4.47 billion from $3.25 billion while interest payments decreased by 10 percent to $1.46 billion compared to $1.62 billion last year.
The BSP, in its external debt report, said key external debt indicators remained at prudent levels despite the rise in external debt.
The country’s outstanding total external debt as end-June went up by 15.66 percent year-on-year to $101.2 billion. This was an increase of $13.7 billion over the same period in 2020 of $87.5 billion.
External debt ratio vis-à-vis the gross domestic product is at 26.5 percent, slightly lower than end-March’s 26.6 percent, on account of the 11.8 percent gross domestic product (GDP) growth in the second quarter.
The external debt-to-GDP ratio is still one of the lowest in the ASEAN bloc. A manageable external debt to GDP ratio means a country’s “sustained strong position to service foreign borrowings in the medium to long-term (MLT),” said the BSP.
The debt service ratio (DSR), meanwhile, increased to 9.4 percent as of end-June from 8.4 percent same period in 2020 because of higher payments.
The DSR, which relates principal and interest payments or the debt service burden to exports of goods and receipts from services and primary income, measures the country’s ability to pay for maturing foreign currency loans.