MANILA - The Bangko Sentral ng Pilipinas said the country’s external debt remains manageable despite the increase in borrowings this year to finance the Philippines’ COVID-19 response.

The national debt breached P9 trillion at the end of June, of which 32 percent was foreign debt. Since the start of the year, the government has borrowed over P1.3 trillion, according to the Bureau of Treasury.

But BSP Governor Benjamin Diokno said the country can continue to pay its maturing foreign obligations thanks to its “markedly improved external debt manageability achieved through 20 years of critical structural reforms.”

“Along with sound economic management, reforms involving industry and foreign exchange liberalization, tax and debt management, and the financial sector have helped strengthen the regulatory environment and the economy’s capacity to absorb shocks,” Diokno said.

The BSP said the Philippines had “a robust external debt position” before the quarantines were imposed.

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The central bank said the country’s external debt stood at $81.4 billion at end-March 2020, down by $2.2 billion from the $83.6 billion recorded in December 2019.

“The first quarter 2020 external debt figure represented 21.4 percent of the country’s Gross Domestic Product, much lower than the 57.3 percent recorded 15 years earlier,” the BSP said.

It added that 83.6 percent of the country’s external debt as of March was medium to long term (MLT), meaning debt payments are spread out and more manageable. Moreover, 57.8 percent of MLT borrowings have fixed interest rates which minimizes risks from possible interest rate increases, the BSP said.

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The Monetary Board approved $5.6 billion in foreign borrowings as of July this year citing the country’s strong external debt profile.

The Philippines borrowed $2.6 billion from the Asian Development Bank, $1.5 billion from the World Bank, $750 million from the Chinese-led Asian Infrastructure and Investment Bank, $447 million from the Japan International Cooperation Agency, and $295 million from Agence Francaise de Developpement.

Some lawmakers have called on the government to borrow even more money, given the country’s improved credit ratings, so that the government could spend more to stimulate the economy.

The Department of Finance however thumbed down this proposal.