PHLs foreign debt service bill soars to $2.13 billion - BusinessWorld Online

A US five-dollar note is seen in this illustration photo taken on June 1, 2017.— REUTERS/THOMAS WHITE/ILLUSTRATION THE PHILIPPINES’ debt service on foreign loans continued to climb amid higher principal payments as of February, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.

At end-February, the country’s external debt service burden stood at $2.127 billion, increasing by 31.54% from the $1.617 billion posted in the comparable year-ago period.This was the second consecutive month of increase in the external debt service bill.

Based on data posted on the central bank’s website, principal payments more than doubled (129.02%) to $884 million at end-February from $386 million a year earlier.Interest payments, on the other hand, inched up by 0.89% year on year to $1.243 billion at end-February from $1.232 billion.    However, Jonathan L.

Ravelas, a senior adviser at Reyes Tacandong & Co., noted that while the external debt service bill rose sharply, it merely reflects “timing and structure” rather than a sudden deterioration.“The big story is the 129% surge in principal payments — this tells us maturities are clustering, meaning we’re repaying more obligations that simply fell due, rather than borrowing improperly,” he added in a Viber message.

“Interest payments, in contrast, are relatively flat, which suggests borrowing costs are stabilizing despite the high global rate environment.The debt service bill represents principal and interest payments after rescheduling, according to the BSP.

This includes principal and interest payments on fixed medium- and long-term credits, including International Monetary Fund credits, loans covered by the Paris Club and commercial bank rescheduling, and New Money Facilities.It also covers interest payments on fixed and revolving short-term liabilities of banks and nonbanks.

However, the debt service data exclude prepayments on future ...