MANILA - Bangko Sentral ng Pilipinas Governor Nestor Espenilla Jr. announced that the Philippines' outstanding external debt stood at US$73.2 billion as of end-March 2018, marginally higher by US$98 million, or 0.1 percent, than the end-2017 level of US$73.1 billion.
The slight increase in the debt stock during the first quarter was brought about by positive foreign exchange revaluation adjustments at US$621 million, due largely from the weakened US dollar against the Japanese yen that pushed the debt stock higher by US$655 million, although peso depreciation against the US dollar decreased the debt level by US$144 million; and prior periods' adjustments, worth US$685 million, due to late reporting.
These upward pressures on the debt stock were partially mitigated by net principal repayments (US$735 million), which resulted mainly from the bullet payments at maturity as well as prepayments by the private sector; and transfer of holdings of Philippine debt papers issued offshore (US$472 million) by non-residents to residents, the BSP said.
Compared to the end-March 2017 figure, however, the debt stock declined year-on-year by US$609 million (or 0.8 percent) from US$73.8 billion due to net repayments (US$3.4 billion), primarily on the private sector's short-term non-trade accounts. This downward impact on the debt stock was partly offset by previous periods' adjustments (positive US$1.5 billion) due to late reporting; upward FX revaluation adjustments (US$713 million); and transfer of Philippine debt papers from residents to non-residents (US$618 million).
External debt refers to all types of borrowings by Philippine residents from non-residents, following the residency criterion for international statistics.
Meanwhile, the BSP has revised its balance of payments (BOP) forecasts for this year, seeing higher deficit of USD1.5 billion from its initial projection of USD1 billion.
In a statement, the BSP said even with the upward revision of deficit outlook, this remains a “very manageable external payments position”.
The new projection has factored in recent and prospective economic developments in domestic and global market.
The country’s current account at the end of this year is seen to register a higher deficit of USD3.1 billion, or equivalent to 0.9 percent of gross domestic product. Initially, current account deficit is only projected at USD700 million.
“This mainly reflects the projected wider trade deficit as growth in goods imports largely outpaces exports growth,” the central bank explained.
BSP said imports of goods this year is expected to increase by 11 percent, sustaining the momentum of inward shipment of goods in the last quarter of 2017.
In a press briefing Thursday, BSP’s Department of Economic Statistics head Redentor Paolo Alegre Jr. said the expansion of imports of goods in the first quarter of 2018 is boosted by the strong demand in goods -- particularly capital goods -- given the country’s economic growth.
“Goods imports are buoyed by the moderate increase in commodity prices, continued growth in imports of raw materials and manufactured goods, capital goods, and consumer goods, in line with sustained strong domestic demand,” the central bank noted.
Exports revenue is also expected to further recover this year, with growth seen at 10 percent due to “firm recovery of both advanced and emerging market economies”.
The BSP added that steady inflows of remittances from overseas Filipinos and revenues in the sectors of business process outsourcing and tourism will back the current account for 2018.
The central bank also made upward adjustment on the position of the country’s financial account, which is expected to record higher net inflow.
“Net inflows of FDI (foreign direct investments) in 2018 are projected to reach USD9.2 billion,” BSP noted as it initially forecasted net FDI inflows at USD8.2 billion.
Gross international reserve outlook remains at USD80 billion, an ample level of external assets that can cover more than seven months’ worth of imports of goods and payments of services and income.*PNA
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