PARLIAMENT Malaysia's external debt has tripled to a whopping RM740 billion in the third quarter of 2014 from RM196 billion at the end of 2013.

In a written answer to PKR’s Selayang MP William Leong ( left ), the Finance Ministry claimed that the sharp spike was due to "new definitions" set for external debt.

The ministry said almost two-thirds of the additional external debt spike was because of foreigners holding Malaysian bonds, which is now also considered as part of external debt.

This, Leong pointed out, highlighted the dangers of borrowing made by local firms from foreign firms, such as those by 1Malaysia Development Berhad (1MDB), where a substantial amount of its RM42 billion debt is reportedly owed to foreign entities.

"This is where firms such as 1MDB fall under, and this huge external debt represents such companies having debts with foreigners," he said.

The latest figures also revealed that the federal government’s debt stood at RM582 billion, or 54.5 percent of the Gross Domestic Product (GDP), inching closer to the 55 percent self imposed debt ceiling.