The Philippines’ foreign borrowing activity defied a downward trend in the first half of 2024, with a significant rise in the second quarter, according to data from the Bangko Sentral ng Pilipinas (BSP).
Total first-half foreign debt acquisitions came in at $6.77 billion, reflecting an 18.3% decrease compared to the same period last year.
However, the second quarter saw the BSP approving $3.90 billion in foreign loans for the government, a 42.85% jump from the second quarter of 2023 and a 35.88% increase over the first three months of the year.
The breakdown of borrowings reveals a focus on infrastructure development, with $1.9 billion allocated to project loans specifically earmarked for transportation projects.
However, a $2 billion bond issuance suggests broader financing needs for the national government’s general budget.
The BSP, emphasizing its commitment to “judicious use of resources” and maintaining “manageable external debt levels,” is likely monitoring this development closely.
The Philippines’ external debt ratio remains stable at 29% of GDP, despite the increased borrowing.
However, the BSP’s future stance on foreign borrowing remains a topic of interest, particularly given the second-quarter surge.
