Philippines External Debt Tender

Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno announced that the Philippines outstanding external debt stood at US79.0 billion as of end-2018 up by US2.5 billion or 3.3 percent from the end-September 2018 level of US76.4 billion.The growth in the debt level during the quarter was due largely to net availments of US1.6 billion as private banks borrowed offshore to fund purchases of a high-quality liquid assets in preparation for the increase in the Liquidity Coverage Ratio LCR threshold as part of the Basel 3 reform package issued by the Basel Committee on Banking Supervision and b Republic of the Philippines RP bills among others. Positive foreign exchange FX revaluation adjustments amounting to US1.0 billion further contributed to the increase in the debt stock as the Philippine Peso appreciated against the US Dollar during the reference period due mainly to improving domestic inflation data and strong remittance inflow. The rise in the debt stock was partially offset by US139 million increase in residents investments in Philippine debt papers issued offshore.Year-on-year the debt stock grew by 8.0 percent from the end-2017 level of US73.1 billion due largely to net availments by both public US3.5 billion and private sectors US3.2 billion. Specifically this is attributed to the National Government NGs increased financing for its infrastructure development and social spending programs private banks preparation for the increase in the LCR threshold under the Basel 3 liquidity rule and to source funding for purchases of RP bills while other private firms decided to increase working capital expand funding base and extend term liabilities. Prior periods adjustments US594 million further increased the debt levels. However the increase in resident holdings of Philippine debt papers issued offshore US1.2 billion and negative FX revaluation adjustments US125 million partially tempered the sharp increase in the debt stock during the year.External debt refers to all types of borrowings by Philippine residents from non-residents following the residency criterion for international statistics.