Philippine external debt jumps to USD 149B

The Philippines’ outstanding external debt jumped to a record USD 148.87 billion as of end-June amid the weakening of the US dollar, the Bangko Sentral ng Pilipinas (BSP) said.

Central bank data showed the country’s external debt rose by 14.4% from USD 130.318 billion in the same period last year.

“The increase in external debt was driven primarily by borrowings, which included bond issuances by the National Government amounting to USD 5.83 billion and external financing tapped by local banks amounting to USD 3.44 billion,” the BSP said in a statement.

Quarter on quarter, external debt inched up by 1.5% from the USD 146.74 billion logged at the end of the first quarter.

“The increase in external debt for Q2 (second quarter) 2025 was primarily due to valuation effects from the depreciation of the US dollar,” the BSP said.

External debt accounts for all borrowings by residents from nonresidents.

The BSP said the external debt level remained “sustainable,” equivalent to 31.2% of gross domestic product. This was better than the 31.5% in the previous quarter but higher than the 28.9% a year ago.

The central bank said the weaker greenback increased the US dollar equivalent of borrowings denominated in other currencies by USD 1.49 billion.

In the April-to-June period, the peso recorded a strong performance against the dollar as it traded between the PHP 55 and PHP 56 level, averaging PHP 56.581 as of end-June.

“The net acquisition of Philippine debt securities amounting to USD 660.96 million also contributed to the increase (in external debt), while net repayments amounting to USD 315.67 million partially tempered the increase in the country’s external debt,” the BSP said.

Most of the country’s public sector obligations, amounting to USD 88.371 billion, were from the National Government while the rest came from the BSP (USD 3.919 billion) and government banks (USD 1.81 billion).

Japan remained the Philippines top creditor with loans amounting to USD 15.599 billion, followed by the United Kingdom with USD 6.358 billion and Singapore with USD 4.837 billion.

The borrowing mix was composed mainly of US dollar-denominated debt, followed by debt in Philippine peso and debt in Japanese yen.

As of the second quarter, the country’s short-term external debt based on remaining maturity concept (STRM) was at USD 28.63 billion. STRM debt is composed of loans with original maturities of one year or less plus amortization on medium and long-term accounts falling due within the next 12 months.

“This level remains well-covered by the country’s gross international reserves (GIR) of USD 106 billion, providing 3.7 times cover for short-term obligations,” the BSP said.

“The country’s GIR-to-STRM debt ratio remains at par with emerging economy peers.”

Meanwhile, the BSP said resident borrowers’ lower principal and interest payments brought the debt service ratio down to 8.7% during the period from 9.8% a year ago. This ratio measures a country’s capacity to meet its obligations based on its foreign exchange earnings.

“This resulted from lower principal and interest payments by resident borrowers as of the second quarter of 2025,” it said.

BSP data showed the public sector’s external debt went up by 88.2% to USD 94.801 billion at end-June from USD 50.36 billion the previous year.

Private sector obligations, on the other hand, declined by 32.3% year on year to USD 54.072 billion from USD 79.83 billion a year ago. — Katherine K. Chan