The Philippines’ outstanding external debt, or borrowings owed by residents to non-residents, climbed in the first quarter of 2025, driven by increased borrowings from the national government and the banking sector.
The country’s external debt reached $146.74 billion at the end of March 2025. This represents a 6.6-percent increase from the fourth quarter of 2024 and a 14.0-percent rise from the first quarter of 2024.
The latest figure is equivalent to 31.5 percent of the country’s gross domestic product (GDP), up from 29.8 percent in the previous quarter. Despite the increase, this still reflects the country’s ability to repay its external obligations, the Bangko Sentral ng Pilipinas (BSP) said in a statement.
Data showed that as of end-March 2025, the Philippines’ short-term 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 totaled $106.67 billion, providing 3.27 times cover for short-term obligations.
While the short-term external debt cover has trended downwards in recent years, the GIR level continues to provide a robust external liquidity buffer, the BSP said.
The debt service ratio, an indicator of the country’s capacity to service debt by comparing loan payments with income from exports and other inflows, declined to 8.4 percent from 9.0 percent a year earlier. This decline reflects 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 activities, aimed at supporting infrastructure projects and other budgetary requirements. The government raised $5.06 billion through global bond issuances and loans from foreign development institutions.
Local banks accessed offshore markets during the same period for short-term financing to support trading operations and address liquidity needs.
The BSP said that on a year-on-year basis, the rise in external debt was also primarily driven by bond issuances from the national government, totaling $7.83 billion, and borrowings by local banks amounting to $6.14 billion.
