MANILA, Philippines - Companies are prepaying more of their foreign currency-denominated debts in the first half, as the peso continued to appreciate.
Data from the Bangko Sentral ng Pilipinas showed in the first 6 months of 2012, private companies paid $735 million worth of foreign currency-denominated debts ahead of maturity. The amount was 17% higher than the $628 million during the same period in 2011.
Of the debts that were prepaid this year, 99% were debts secured by non-bank private entities., and the rest by privately owned banks.
Earlier, BSP officials encouraged borrowers to prepay their debts to foreign creditors, as the peso appreciated against the US dollar. The peso traded in the 42 to $1 range in the first half of 2012, compared to the 43 to $1 level last year.
As the peso appreciated, companies can use less pesos in paying for the foreign currency-denominated debts.