The National Governments (NG) outstanding loans increased by 4.2 percent year-on-year or up by P177.4 billion to P4.436 trillion as of end April.

The government and the Bangko Sentral ng Pilipinas (BSP) tap the dollar reserves to pay for maturing loans.

Based on Bureau of Treasury data, the Philippine national debt in April was however lower by 0.5 percent compared to March with stronger peso helping lower debt levels. Foreign debt decreased to P1.888 trillion while domestic debt was higher at P2.548 trillion.

The country's dollar reserves are fueled by inflows such as foreign direct investments (FDI) registered with the BSP.

The central bank reported that FDIs dropped by 49.2 percent in the first four months compared to the same period in 2009. For the month of April alone, FDI net inflows totaled $85 million, 86.1 percent lower year-on-year.

“While FDI posted lower year-on-year net inflows owing to challenges posed by the uneven pace of economic recovery across the globe, the country continued to be a recipient of foreign funds given its favorable macroeconomic fundamentals,” said BSP Governor Amando M. Tetangco Jr. in the press release.

FDIs boost the country’s gross international reserves, which as of June has reached $48.4 billion.
In the meantime, BSP said positive balances were recorded across all the various categories of FDI in April.

The other capital and reinvested earnings accounts yielded net inflows of $20 million and $8 million, respectively. Net equity capital infusion amounted to $57 million, significantly lower compared to last year's $629 million.