Philippine external debt burden eases

MANILA, Philippines — The Philippines’ external debt service burden eased in the first 11 months of 2025, as both principal and interest payments declined, according to data from the Bangko Sentral ng Pilipinas (BSP).

The government and private sector paid a combined $12 billion to foreign creditors from January to November, down nearly 23 percent from a year earlier.

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That total was equivalent to 2.9 percent of gross domestic product (GDP), improving from 3.9 percent previously and signaling a stronger capacity to meet foreign debt obligations.

Its share of total export receipts—another measure of debt affordability—also fell to 20.7 percent from 30.6 percent. This indicated that the country used about 21 cents of every dollar earned from exports to meet its foreign debt obligations, compared with 31 cents previously.

Broken down, principal payments fell by nearly 42 percent to $4.7 billion, while interest payments slipped 1.6 percent to $7.2 billion.

Interest rate downtrend

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said fewer external debts may have fallen due in 2025 than in the previous year, reducing amortization costs. He added that declining global interest rates may have helped temper interest payments.

“For the coming months, lower foreign borrowings in the total borrowing mix of the national government to reduce foreign exchange risks, and possible rate cuts by the US Federal Reserve would further lead to reduced foreign debt servicing bill,” Ricafort said.

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Overall, combined external obligations of the public and private sectors reached $149 billion in the first 11 months, up 6.8 percent on an annualized basis. The total represented 30.9 percent of GDP, slightly higher than 30.6 percent previously.

Government offshore liabilities grew nearly 11 percent to $96.3 billion, or 20 percent of GDP, while private sector obligations remained relatively flat at $52.8 billion, equivalent to 10.9 percent of GDP.

Under a presidential order, the BSP is the designated agency for compiling and publishing external debt statistics, a mandate aimed at bolstering transparency. Readily available debt data help borrowers and lenders make better decisions while giving policymakers and analysts the tools to safeguard debt sustainability and broader macroeconomic stability. INQ