Total external debt, or borrowings owed by residents to non-residents, stood at $137.63 billion as of end-December 2024, down by $2.02 billion (or 1.4 percent) from the $139.64 billion level as of end-September 2024.

The external debt ratio (EDT expressed as a percentage of gross domestic product) remains at a prudent level, falling to 29.8 percent from 30.6 percent last quarter.

This improvement in the ratio was driven by the decline in external debt levels in conjunction with the Philippine economy’s 5.2 percent real GDP growth for the fourth quarter of 2024 and 5.6 percent growth for the full year 2024.

Other key external debt indicators also remained at sustainable levels. Gross international reserves (GIR) stood at $106.26 billion as of end-2024 and represented 3.81 times cover for short-term (ST) debt based on the remaining maturity concept.

The debt service ratio (DSR), which relates principal and interest payments (debt service burden) to exports of goods and receipts from services and primary income for the year, rose to 11.5 percent from 10.3 percent for the same period last year due to the higher recorded debt service payments.

The DSR and the GIR cover for ST debt are measures of the adequacy of the country’s foreign exchange (FX) resources to meet maturing obligations.

The reported decline in the country’s external debt in the last quarter of 2024 was brought about by the: $1.29 billion negative FX revaluation of borrowings denominated in other currencies; net acquisition by residents of Philippine debt securities from non-residents aggregating $835.33 million; and recorded net repayments amounting to $133.51 million. Prior periods’ adjustments of $242.74 million partially increased the debt stock.

During the reference quarter, the appreciation of the US dollar decreased the value of the country’s debt stock by $1.29 billion. The US dollar strengthened due to improved US economic performance, market perception towards Federal Reserve’s future policy path as well as expectations on the shift in US trade and investment policies under the then incoming administration.

The same underlying factors may have also triggered non-residents to offload Philippine debt securities, further lowering outstanding external debt by $835.33 million.

Foreign borrowings transactions in the last quarter of 2024 marked a reversal of the net availments recorded in the first three quarters of the year. In particular, the last three months of 2024 yielded a $133.51 million net repayment, driven by the lower net availments by non-bank public sector entities ($178.62 million) as well as net repayments by private sector non-banks ($212.85 million) and the banking sector ($99.27 million).

Year-on-year, the country’s debt stock rose by $12.23 billion (or by 9.8 percent) from the end-December 2023 level of $125.39 billion. The increase was driven primarily by net availments of $9.61 billion to address liquidity requirements of the public and private sector.

Public sector net availments for the 12-month period reached $5.59 billion while private sector borrowers accumulated net availments of $4.03 billion for the same period. The net acquisition of Philippine debt securities by non-residents of $3.37 billion resulting from investor preference towards emerging market debt securities for most of 2024 as well as prior years’ adjustments of $634.76 million further contributed to the increase in debt stock.

Meanwhile, the negative FX revaluation of borrowings denominated in other currencies of $1.39 billion tempered the increase in debt.

As of end-December 2024, the maturity profile of the country’s external debt remained predominantly medium and long term (MLT) in nature. Under the remaining maturity concept, outstanding MLT borrowings stood at $109.72 billion with its share to total at 79.7 percent.

Meanwhile, outstanding ST debt under the remaining maturity concept comprised 20.3 percent (or $27.91 billion) of the total outstanding external debt.

Of the MLT accounts, $63.42 billion (or 54.4 percent) have fixed interest rates, $51.98 billion (or 44.5 percent) carry variable rates, and $1.28 billion (or 1.1 percent) are non-interest bearing.

Public sector external debt declined by $1.54 billion (or 1.8 percent) to $85.34 billion in the last quarter of 2024 from $86.88 billion in end-September 2024 mainly due to the $1.44 billion negative FX revaluation of borrowings denominated in other currencies.

Prior periods’ adjustments of$71.23 million as well as net repayments of S$63.51 million further reduced the outstanding levels. About $79.31 billion (or 92.9 percent) of public sector obligations are of the National Government, while the remaining $6.03 billion (or 7.1 percent) pertained to borrowings of government-owned and controlled corporations, government financial institutions, and the Bangko Sentral ng Pilipinas.

Private sector debt slightly eased to $52.29 billion at the end of the fourth quarter of 2024, reflecting a $473.35 million (or 0.9 percent) decrease from the end-September 2024 level of $52.76 billion.

The modest decline in private sector borrowings were driven by the net acquisition by residents of debt securities issued offshore aggregating $870.03 million; negative FX revaluation of borrowings denominated in other currencies by $154.11 million; and net repayments of $70 million. These offset prior periods’ adjustments of $313.98 million.

Loans from official sources (multilateral and bilateral creditors) had the largest share ($54.12 billion or 39.3 percent) of the total outstanding debt, followed by borrowings in the form of bonds/notes ($45.11 billion or 32.8 percent) and obligations to foreign banks and other financial institutions ($31.22 billion or 22.7 percent); the rest ($7.18 billion or 5.2 percent) were owed to other creditors (mainly suppliers/exporters).

Major creditor countries were Japan ($15.18 billion), Singapore ( $5.06 billion) and the Netherlands ($4.55 billion).

In terms of currency mix, the country’s debt stock remained largely denominated in US dollar ($101.79 billion or 74 percent of total), followed by the Philippine peso ($12.68 billion or 9.2 percent) and Japanese yen ($10.33 billion or 7.5 percent of total).

The rest ($12.82 billion or 9.3 percent) pertained to 12 other currencies, including the euro ($8.07 billion or 5.9 percent) and Special Drawing Rights ($3.71 billion or 2.7 percent). Bangko Sentral ng Pilipinas