By Lee C. Chipongian

The country’s external debt service declined by 34.76 percent year-on-year to $1.526 billion as of end-March, data from the Bangko Sentral ng Pilipinas (BSP) show.

BSP logo - External debt service declines 34.7% in Q1

Principal payments in the first quarter was higher at $1.610 billion from $669 million same time in 2018. Interest payments in the meantime, was down to $729 million from $857 million last year.

The BSP, in its external debt report, said that as of end-March, key external debt indicators remained at prudent levels despite the rise in external debt.

The debt service ratio or DSR as of end-March 2019 improved to 5.1 percent from eight percent last year. The DSR has consistently remained at single digit levels, said the BSP, and explained that the DSR which relates principal and interest payments or debt service burden to exports of goods and receipts from services and primary income, is a measure of adequacy of the country’s foreign exchange earnings to meet maturing obligations.

The external debt ratio which is a solvency indicator, also indicates the country’s “sustained strong position to service foreign borrowings in the medium to long-term,” according to the BSP.

The country’s outstanding external debt went up by 9.88 percent to $80.43 billion at the end of the first quarter from same time last year of $73.19 billion because of new government borrowings, said the BSP.

On a quarter-on-quarter basis, external debt stock was up by 1.9 percent or $1.5 billion from $79 billion end-December 2018.

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