Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno announced that the Philippines’ outstanding external debt (EDT) remained at a prudent level as its ratio to Gross Domestic Product (GDP) was recorded at 27% at end-December 2021.
The ratio remains one of the lowest as compared to other ASEAN member countries. The country’s EDT expressed as a percentage of GDP is a solvency indicator. The low EDT to GDP ratio indicates the country’s sustained strong position to service foreign borrowings in the medium to long-term (MLT).
The Governor further stated that other key external debt indicators also remained at prudent levels. Gross International Reserves (GIR) stood at US$108.8 billion as of end-2021 and represented 7.2 times cover for short-term (ST) debt based on the original maturity concept.
The debt service ratio (DSR) increased to 7.2% in 2021 from 6.7% in 2020 due largely to higher payments. The DSR, which relates principal and interest payments (debt service burden or DSB) to exports of goods and receipts from services and primary income, is a measure of the adequacy of the country’s foreign exchange (FX) earnings to meet maturing obligations. (BSP) – bny
