The Philippines’ outstanding external debt surged 14 percent to $146.74 billion in the first quarter of 2025, driven by continued borrowings from the national government and the banking sector, the Bangko Sentral ng Pilipinas (BSP) said over the weekend.
The latest external debt figure was equivalent to 31.5 percent of the gross domestic product (GDP), up from 29.8 percent in the previous quarter. The central bank said this still reflected the country’s ability to repay its external obligations.
It said that as of end-March 2025, the country’s short-term (ST) external debt, based on the remaining maturity concept, stood at $32.67 billion. This 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 BSP said.
The GIR level continues to provide a robust external liquidity buffer, despite a downward trend in the short-term external debt cover in recent years, it said.
Meanwhile, the debt service ratio, an 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 percent from 9.0 percent a year earlier. This reflected lower principal and interest payments by resident borrowers in the first quarter of 2025.
“The increase in external debt in the first quarter was primarily attributed to the national government’s fund-raising activity meant to support infrastructure projects and other budgetary requirements,” the BSP said.
The national government raised $5.06 billion from the issuance of global bonds and loans extended by foreign development institutions.
Local banks also accessed offshore markets in the same period for short-term financing to support trading operations and address liquidity needs.
The BSP said that year-on-year, the increase in external debt was also driven primarily by bond issuances by the national government, totaling $7.83 billion, and borrowings by local banks amounting to $6.14 billion.
