By THEPHIBIZNEWS STAFF
The country’s external debt dropped to 19.67% of Gross National Income (GNI) as of the end of the first quarter of 2020 from 20.98% in the same period in 2019. As a percent of Goods and Services and Primary Income, it also dropped to 54.4% from 54.8%. The decline is due primarily to public sector debt which dropped from US$40.13B to US$38.3B. (Table 1)
Compared with two decades ago when the country was recovering from the Asian financial crisis, external debt ratios in 2020 were 41.4% of the debt-GNI ratio and 51.2% of the debt-exports ratio in 2000.
Compared with those of its Asian peers, external debt ratios of the Philippines are lower in 2018, the latest data from the World Bank show. As a percent of GNI, the Philippines’ external debt ratio is only 19.9%, compared to the 33.6% average for nine Asian economies. The country’s ratio is the third lowest behind China and India.
DOF View
The Philippines’ prudent debt policy has enabled the country to strengthen its defenses against external shocks like the COVID-19 pandemic. This is one of the reasons for the strong confidence of investors in the Philippine economy.
| Table 1. EXTERNAL DEBT RATIOS | |||||
| 2000 | 2018 | 2019 | 2019 Q1 | 2020 Q1 | |
| External debt, US$ Billion | 52.060 | 78.960 | 83.618 | 80.431 | 81.421 |
| Public Sector | 34.13 | 33.37 | 36.05 | 40.13 | 38.30 |
| Private Sector | 17.93 | 45.59 | 47.57 | 40.30 | 43.12 |
| % of GNI* | 47.47% | 19.89% | 19.41% | 20.98% | 19.67% |
| % of Exports of Goods & Services & Primary Income | 106.1% | 53.9% | 53.88% | 54.80% | 54.37% |
| Sources of basic data: BSP and NEDA
*GNI includes Gross Domestic Product (GDP) plus net factor income from abroad
|
|||||
| Table 2. EXTERNAL DEBT RATIO | ||
| Percent of GNI | ||
| 2017 | 2018 | |
| Philippines | 23.3% | 19.9% |
| Indonesia | 42.1% | 37.6% |
| Malaysia | 68.7% | 67.8% |
| Thailand | 34.0% | 35.1% |
| China | 13.9% | 14.5% |
| South Korea | 27.3% | 27.5% |
| Taiwan | 31.8% | 33.7% |
| India | 20.4% | 19.3% |
| Vietnam | 41.8% | 46.7% |
| AVERAGE | 33.7% | 33.6% |
| Source: World Bank
|
||
