The Philippines has warned that large businesses face debt repayments totaling over 1.6 trillion pesos over the next three years, with a high proportion of dollar-denominated debt posing a risk to the currency.
June 8, 2569 at 13.59:XNUMX a.m. Bloomberg News reported that The Philippine financial regulator has warned of potentially increased exchange rate risks in the coming years. Following the maturity of large corporations in the country, which have debts totaling approximately 1.6 trillion pesos, or about 26,000 billion US dollars, between 2570 and 2572,
The 2568 Financial Stability Report, released on Monday, indicates that large corporations in the Philippines are facing a debt wall with maturing debts in the coming years, representing nearly 25% of the total debt of these large companies in the country.
The report also stated that a significant portion of the debt is at risk from exchange rate fluctuations, as US dollar-denominated debt accounts for an average of 37.6% of all debt these companies will have to manage over the next five years.
While businesses can still manage refinancing burdens through bond issuance, bank borrowing, and the use of internal liquidity, regulators believe that the risks from debt refinancing and currency volatility still need to be closely monitored, given the size of the debt and the high proportion of foreign-denominated debt.
The report was prepared by the Joint Financial Stability Committee, which comprises key Philippine agencies including the Central Bank of the Philippines (Bangko Sentral ng Pilipinas: BSP) and the Department of Finance.
The warning comes amid pressure on the peso, which has weakened to a record low this month. The peso is one of the Asian currencies hardest hit by soaring oil prices, as the Philippines imports almost all of its oil and fuel from the conflict-ridden Middle East.
However, the Central Bank of the Philippines stated that the country's financial system remained stable last year, with the banking sector maintaining strong capital positions and sufficient capacity to extend loans and absorb potential losses.
In addition to the issue of private sector debt, the report also warns of other risks that could affect the country's financial stability, including high housing prices, the expansion of unsecured consumer credit, mostly credit card debt, as well as cyber risks and geopolitical tensions such as a potential war between Iran and the United States.
Philippine Central Bank Governor Eli Remolona said regulators will intensify coordination by establishing clear guidelines on when to intensify risk monitoring and communicating assessments of the financial institutions under their supervision more effectively.
refer : bloomberg.com
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