By Alito L. Malinao
MANILA, June 23 (Xinhua) -- The external debt ratio of the Philippines, or the total foreign debt taken as a percentage of the country's gross domestic product (GDP), has dropped in the first quarter of this year.
In a press statement issued on Friday, the Bangko Sentral ng Pilipinas (BSP), the country's central bank, said the external debt ratio was down to 27.4 percent from Janary to March this year from the 29.5 percent registered for the same period last year.
However, the BSP said that in absolute terms, the outstanding external debt of the Philippines in the first quarter rose to 62.9 billion U.S. dollars, up by 3.3 percent from 60.9 billion U.S. dollars as of the same period last year.
The BSP explained that despite the increase in the absolute amount of debt incurred by the government and the private sector for the first quarter, the debt ratio dropped because the growth of GDP in the first quarter was much faster. The country's GDP grew by 6.4 percent in the first quarter, a big jump from the 3.7 percent full-year growth in 2011.
According to BSP officials, the country's outstanding foreign debt grew because of an increase in investments.
"The increase is due largely to 2.3 billion U.S. dollars net availments (excess of borrowings over repayments) as investment and business activities by both public and private sector entities escalated due to the upbeat business sentiment," the BSP said.
Despite the higher debt level, major external debt indicators remain at prudent and comfortable levels in the first quarter, the BSP added.
The National Statistical Coordination Board (NSCB), the Philippine government agency tasked to monitor and evaluate all economic data, said that the mix of indicators used to forecast economic developments points to sustained growth for the country in the second quarter of 2012.
After a decline in the third quarter of 2011, the composite leading economic indicators, or LEIs, accelerated over the next three consecutive quarters, strongly indicating a continuation of positive outlook for the country's economy, NSCB said.
In a report posted on its website, the NSCB said that the LEIs grew 0.125 in the second quarter of the year from a revised 0.064 in the first quarter.
NSCB Secretary General Romulo A. Virola said growth in LEIs hinted at better prospects for business and, thus, economic expansion for the rest of the year.
Of the 11 indicators that make up the composite LEI, seven contributed positively in the second quarter of 2012, the NSCB said.
The LEI System, or LEIS, was developed by the NSCB and the National Economic and Development Authority to serve as basis for short-term forecasting of macroeconomic activity in the country.
The NSCB has also estimated that as of the end of last year, every Filipino owed 51,675 pesos (1,200 U.S dollars), to domestic and foreign creditors.
The Philippines has now a population of more than 95 million.
Despite its huge debt burden, the Philippines managed to lend 1 billion U.S. dollars to the International Monetary Fund (IMF).
Malaca?ang, the seat of the Philippine government, said that it was an obligation on the part of the Philippines to help countries in dire need of funding through the (IMF) as it brushed off criticisms that it was improper for the government to lend money when it needs funds for programs to alleviate poverty and hunger in the country.
Edwin Lacierda, President Benigno Aquino's spokesperson, justified the move by saying that the Philippines had been a recipient of IMF assistance for the past 40 years.
"Now that we have been considered a creditor nation, we feel it is our obligation to assist those nations who require funding from IMF," Lacierda said in a press briefing.
Lacierda said that contribution of 1 billion U.S. dollars to IMF's standby fund of 456 billion U.S. dollars "would also help in stabilizing the crisis that's going on in Europe."
"It is our responsibility; it is part of our obligation (to the) IMF who has assisted us during our times of crisis in the Philippines," Lacierda said.
In a separate statement, BSP Governor Amando Tetangco said the Philippines will get returns from the loan it extended to the IMF.
Tetangco said that for nearly 40 years until 2006, the Philippines itself was a net borrower from the IMF. "We finally fully paid our loans to IMF in December 2006 as the implementation of continuing reforms has made our economy stronger," he said