The Philippines’ external debt service burden rose by 1.34 percent to $4.914 billion as of the end of April, up from $4.849 billion in the same period last year, the latest data from the Bangko Sentral ng Pilipinas (BSP) showed.
The modest increase was attributed to fewer prepayments of foreign currency obligations.
he external debt service burden serves as a key indicator of a nation’s debt sustainability, reflecting both the public and private sectors’ capacity to meet foreign currency obligations without necessitating debt relief, extraordinary assistance, or leading to default.
This measure encompasses both principal and interest payments, even after any rescheduling of terms.
As of the end of April, principal debt service payments, which included fixed and revolving short-term liabilities, registered a 6.23 percent increase, reaching $2.420 billion from $2.278 billion at the close of April last year.
Concurrently, interest payments rose by 3 percent to $2.494 billion, compared with $2.571 billion for the corresponding period in 2024.
The nation’s total outstanding external debt stood at $146.737 billion as of the end of March this year. This represents a $9.109 billion, or 6.62 percent, increase from the $137.628 billion recorded at the end of March 2024.
In a report issued on June 13, the central bank indicated that the rise in overall external debt during the period was largely driven by increased foreign borrowings by both the national government and the banking sector.
BSP data specified that government bond issuances amounted to $7.83 billion as of the end of March, while local banks secured $6.14 billion in foreign loans.
Despite the increase in total debt, the BSP noted that the country’s external debt-to-gross domestic product (GDP) ratio, which rose to 31.5 percent from 29.8 percent in 2024, “still reflects the country’s ability to repay its external obligations.”
Furthermore, the debt service ratio — an additional indicator of the country’s capacity to service its debt — saw a decline to 8.4 percent as of the end of March, from 9 percent in 2024.
