The Philippines’ external debt service burden has declined to $6.72 billion as of end-June, down by 6.2 percent from $7.164 billion in the corresponding period last year, based on the latest central bank data.
Principal debt service, or the fixed and revolving short-term liabilities, fell 13.14 percent to $2.77 billion from $3.189 billion a year earlier.Bangko Sentral ng Pilipinas (BSP) data showed interest payments slipped by 0.68 percent to $3.949 billion from the previous year’s $3.976 billion.
The external debt service burden is an indicator of the country’s debt sustainability. It refers to both the public sector and private sector’s capacity to pay its foreign currency obligations without debt relief, extraordinary assistance or going into default.
As of end-June, the Philippines’ outstanding external debt stood at $148.87 billion, up by 14.4 percent from $130.18 billion same time last year.
The government’s issuance of global bonds and local banks’ foreign borrowings pushed the total external debt higher.
The central bank said the country’s short-term external debt based on the remaining maturity concept or STRM amounted to $28.63 billion as of end-June. The STRM debt are loans with original maturities of one year or less, plus amortizations on medium- and long-term accounts falling due within the next 12 months.
The latest external debt is equivalent to 31.2 percent of the country’s gross domestic product (GDP), higher than the previous year’s 29 percent.
On a quarter-on-quarter basis, public sector external debt rose 3.6 percent to $94.8 billion in the second quarter of 2025 from $91.53 billion at end-March this year.
The BSP said 93.2 percent, or about $88.37 billion, of public sector obligations are government debt. The remaining 6.8 percent, or $6.43 billion, are borrowings of government-owned and -controlled corporations, government financial institutions and the BSP.
Year-on-year, public sector debt increased by 18.7 percent from the end-June 2024 level of $79.825 billion.
Private sector debt, meanwhile, fell 2 percent to $54.07 billion as of end-June from the previous quarter’s $55.20 billion.
This is due to net repayments from financial institutions worth $1.31 billion as banks settled the bulk of its bills payable.
The net disposition of corporate debt securities amounting to $475.32 million also contributed to the contraction, the BSP said.
Compared with end-June 2024, private sector debt rose by 7.4 percent from $50.357 billion.
