The country’s burden on its external debt service reached $10.846 billion as of end-September, up by 130.66 percent from same period last year of $4.702 billion, based on the latest Bangko Sentral ng Pilipinas (BSP) data.

As explained by BSP officials, external debt service burden increases when both the public sector or the government, and the private sector or corporates are doing a lot of prepayments or repayments of foreign loans.

As of end-September, the debt service burden is equivalent to 3.5 percent of gross domestic product, higher than same time last year of 1.6 percent.

For the period, external debt service principal payments totaled $5.861 billion, up by 110.06 percent from same time in 2022 of $2.783 billion.

Interest payments also increased by 159.77 percent year-on-year to $4.985 billion from $1.919 billion.

Debt service burden represents both principal and interest payments after rescheduling. The principal and interest payments on fixed medium to long term credits include International Monetary Fund credits, other loans and facilities.

Principal external debt service payments are mostly fixed medium to long term credits while interest payments are on fixed and revolving short-term credits of banks and non-banks.

As of end-September, the country’s outstanding external debt went up by 10.12 percent to $118.833 billion versus $107.91 billion same period in 2022. On a quarterly basis, the external debt rose by 0.8 percent from $117.9 billion reported end-June this year.

Public sector external debt declined to $73.7 billion from $74.5 billion in the second quarter. Its share to total likewise dropped to 62 percent from 63.2 percent a quarter ago.

About $67.2 billion or 91.1 percent of public sector obligations were National Government borrowings, while the remaining $6.5 billion were borrowings of government-owned and controlled corporations, government financial institutions and the BSP.

In the same period, private sector debt increased to $45.1 billion from $43.4 billion in the previous quarter. Its share to total rose 38 percent versus 36.8 percent end-June.

The debt service ratio (DSR) meanwhile increased to 10.3 percent from 4.8 percent same time last year due to higher recorded principal and interest payments in 2023.

The DSR and the country’s gross international reserves cover for short-term debt and measures the “adequacy of the country’s foreign exchange resources to meet maturing obligations.” The DSR relates principal and interest payments -- or the debt service burden -- to exports of goods and receipts from services and primary income.

The BSP said the external debt’s maturity profile is still predominantly medium- and long-term (MLT). These are debts with original maturities longer than one  year. MLT accounts comprised 85.6 percent or $101.7 billion of total external debt.

As for the weighted average maturity for all MLT accounts, this decreased to 17.2 years from 17.3 years, with public sector borrowings having longer average tenor of 20.3 years versus 7.2 years for the private sector, said the BSP. Short term liabilities or debts with original maturities of up to one year, accounted for 14.4 percent of the outstanding debt stock and comprised mainly of bank liabilities, trade credits, and other liabilities.