The country’s foreign debt declined 5.6 percent in September to $72.4 billion from a year ago, on higher repayments by the government and the private sector.
Data from the Bangko Sentral ng Pilipinas showed that external debt fell $4.3 billion from $76.6 billion registered in September 2016.
The Bangko Sentral said the decline was due to net principal repayments by both the public and the private sectors ($2.9 billion); negative foreign exchange revaluation adjustments ($1.3 billion) arising from strengthening of the US dollar against other currencies, particularly the yen and the Philippine peso; and increase in residents’ holdings of Philippine debt papers issued offshore ($120 million).
“The peso’s depreciation during the period may have encouraged a shift in borrower preference from foreign to domestic financing to minimize exposure to exchange rate volatility,” the Bangko Sentral said.
External debt refers to all types of borrowings by Philippine residents from non-residents, following the residency criterion for international statistics.
The Bangko Sentral said on a quarterly basis, foreign debt also declined by $125 million or 0.2 percent to $72.4 billion in the third quarter from $72.5 billion in the second quarter.