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  • Writer's pictureMelo Acuna

Philippines has the lowest external debt as of 2019

Department of Finance says PH has the lowest gross external debt among ASEAN-5 members

MANILA – The Department of Finance said the country has the lowest gross external debt among the ASEAN-5 countries. Citing World Bank data, the DOF said the Philippines posted a 20.11% external debt-to-GNI ratio as of 2019. Thailand is the closest behind with 34.07% and followed by Indonesia a 36.85%, while Malaysia registered 64.59%. Vietnam did not have available data for 2019 but recorded a 47.86% external debt ratio in 2018.

In a statement released shortly before midday, the DOF said as a percent of Exports of Goods and Services and Primary Income, the Philippines’ external debt ratio dropped to 54.4% in the first quarter of 2020 from 54.8% in the same period last year. According to the DOF, the decline was primarily due to public sector debt which dropped from US$40.13 billion to US$38.3 billion.

Compared with two decades ago, when the country was recovering from the Asian financial crisis, the external debt ratio in 2020 was significantly lower at 51.2% of the debt-exports ratio in 2000.

With the slowing global economy and dampening of investment activities due to the COVID-19 pandemic, countries rush for funds to enliven the dull economy. This is where co9utnries’ overall debt scenario is crucial. While there are uncertainties, debt metrics are among the important indicators being watched by both domestic and international investors, along with the credit rating agencies.

The Philippines’ relatively low external debt-to-GNI rates attest to the government’s policy of sustaining its prudent borrowing activities. While the realities brought about by the health crisis has seriously changed the global economic and financial landscape, the government is steadfast in implementing different reforms to generate needed revenues to stimulate the economy and at the same time enhance the fiscal space. (Melo M. Acuña)

Department of Finance Building (DOF FAcebook Page)

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