PH external debt rises to $146.74B in Q1 2025

The Philippines’ outstanding external debt saw an increase in the first quarter of 2025 on account of borrowings by the national government and the banking sector, according to data from the Bangko Sentral ng Pilipinas (BSP).

The BSP defines external debt as borrowing owed by residents to non-residents.

The country’s external debt reached $146.74 billion at the end of March 2025, up 6.6% from the previous quarter and up by 14% from the first quarter of last year. 

“The latest external debt figure was equivalent to 31.5% of the country’s gross domestic product,” the BSP said.

“This was higher than the 29.8% in the previous quarter but still reflects the country’s ability to repay its external obligations,” it added.

The BSP attributed the increase in external debt in the first quarter of the year to the national government’s fund-raising activity meant to support infrastructure projects and other budgetary requirements. 

The national government, in particular, raised $5.06 billion from issuance of global bonds and loans extended by foreign development institutions. 

Moreover, local banks accessed offshore markets in the same period for short-term financing to support trading operations and address liquidity needs.

On year-on-year terms, the increase in the external debt was also driven primarily by bond issuances by the national government, which totaled $7.83 billion, and borrowings by local banks amounting to $6.14 billion, according to the BSP.

As of end-March 2025, the country’s short-term (ST) external debt based on the remaining maturity concept —consist of loans with original maturities of one year or less plus amortizations on medium- and long-term accounts falling due within the next 12 months— stood at $32.67 billion. 

The BSP said the ST external debt level remains “well-covered” by the country’s gross international reserves (GIR), which amounted to $106.67 billion, providing 3.27 times cover for short-term obligations. 

The country's GIR level continues to provide a robust external liquidity buffer, despite the downward trend of the short-term external debt cover in recent years, the central bank said.

Meanwhile, the debt service ratio, another indicator of capacity to service debt that compares the country’s loan payments with its income from exports and other inflows, declined to 8.4% from 9% a year earlier. 

“This reflected lower principal and interest payments by resident borrowers in the first quarter of 2025,” the BSP said. —VAL, GMA Integrated News