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The country’s external debt service burden jumped to USD 17.16 billion in 2024, according to preliminary data from the Bangko Sentral ng Pilipinas (BSP).

Central bank data showed debt servicing on external borrowings climbed by 15.6% to USD 17.16 billion last year from USD 14.85 billion in 2023.

Broken down, amortization payments rose by 15.3% to USD 8.94 billion in 2024 from USD 7.76 billion in the previous year.

Meanwhile, interest payments increased by 15.9% year on year to USD 8.22 billion in 2024 from USD 7.1 billion in 2023.

The BSP said that the debt service burden represents principal and interest payments after rescheduling.

This includes principal and interest payments on fixed medium- and long-term credits including International Monetary Fund credits, loans covered by the Paris Club and commercial banks’ rescheduling, and New Money Facilities.

It also covers interest payments on fixed and revolving short-term liabilities of banks and nonbanks.

However, the debt service burden data exclude prepayments on future years’ maturities of foreign loans and principal payments on fixed and revolving short-term liabilities of banks and nonbanks.

Latest data from the BSP showed the Philippines’ outstanding external debt rose by 9.8% to USD 137.63 billion as of end-December 2024 from USD 125.39 billion in the same period in 2023.

This brought the external debt-to-gross domestic product (GDP) ratio to 29.8% at the end of 2024, higher than 28.7% at end-2023.

At end-2024, the external debt service burden as a share of GDP stood at 3.7%, up from 3.4% in the previous year.

The BSP’s external debt data cover borrowings of Philippine residents from nonresident creditors, regardless of sector, maturity, creditor type, debt instruments or currency denomination.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the rise in external debt payments was due to the National Government’s need to finance the budget deficit amid relatively higher interest rates.

“Large amounts of borrowings since the pandemic also increased both principal and interest payments, as some of them already started to mature,” he said.

“However, most of the country’s external debts are mostly medium- to long-term, thereby making debt servicing more manageable,” he added.

The NG’s budget deficit narrowed by 0.38% to PHP 1.506 trillion in 2024 from PHP 1.512 trillion in 2023. However, it exceeded the PHP 1.48-trillion deficit ceiling set by the Development Budget Coordination Committee.

“Going forward, future external borrowings would be a function of budget deficit performance in the coming months amid tax and other fiscal reform measures to help narrow the budget deficit,” Mr. Ricafort said.

Further policy easing by the BSP could also help ease interest payments, he added.

From this year to 2027, the NG plans to source at least 80% of its borrowing program from domestic sources, and 20% from foreign lenders. The government previously adopted a 75:25 borrowing mix. — Luisa Maria Jacinta C. Jocson

The National Government’s (NG) gross borrowings inched up in January amid a rise in domestic debt, the Bureau of the Treasury (BTr) said.

Data from the BTr showed that the total gross borrowings in the first month of 2025 rose by 4.92% to PHP 213.14 billion from PHP 203.15 billion a year prior.

Domestic debt accounted for the bulk or 71.41% of total gross borrowings for the month.

In January, gross domestic borrowings stood at PHP 152.2 billion, up 7.56% from PHP 141.51 billion in the same month in 2024.

This consisted of fixed-rate Treasury bonds amounting to PHP 140 billion and Treasury bills worth PHP 12.2 billion.

On the other hand, gross external debt slipped by 1.14% to PHP 60.94 billion in January from PHP 61.65 billion in the same month last year.

Broken down, program loans stood at PHP 56.29 billion and project loans were at PHP 4.65 billion.

“Primarily to finance the budget deficit, as some of the borrowings by the NG may also be front-loaded, just like the USD 3.29-billion global bond sale amid market volatility brought about by [Donald J.] Trump’s tariffs/protectionist policies,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.

In January, the BTr said the Philippines raised USD 3.29 billion from the sale of the US dollar and euro-denominated bonds.

For 2025, the government set the financing program at PHP 2.545 trillion, where 80% will come from local lenders and 20% will be sourced from foreign sources.

Mr. Ricafort said future NG borrowings supported by fiscal reform measures could help to narrow the budget deficit, while rate cuts from the US Federal Reserve and the Bangko Sentral ng Pilipinas may ease interest payments. — Aubrey Rose A. Inosante

The Bangko  ng Pilipinas (BSP) could cut rates next month, its top official said, noting the possibility of up to 75 basis points (bps) worth of easing for the entire year if economic output weakens further.

“We’ve been on an easing cycle for a while now. We just took a pause,” BSP Governor Eli M. Remolona, Jr. told Bloomberg in a televised interview with Haslinda Amin on Wednesday.

He said there was a higher likelihood that the Monetary Board will deliver a rate cut at its policy review on April 10, especially if inflation turns out better than expected.

Inflation sharply eased to 2.1% in February, bringing the two-month average to 2.5%. This is well within the central bank’s 2-4% target. 

March inflation data will be released on April 4.

Mr. Remolona also signaled the possibility of up to 50 bps worth of rate cuts this year. However, if economic output is weaker than anticipated, the central bank can deliver up to 75 bps worth of easing.

The Philippines’ gross domestic product (GDP) grew by 5.6% in 2024, falling short of the government’s revised 6-6.5% full-year target.

In its latest monetary policy report, the BSP said it sees economic growth settling at the lower end of the government’s 6-8% targets from this year until 2026, citing elevated global commodity prices and trade uncertainties.

First-quarter GDP data will be released on May 8.

US recession

Meanwhile, the BSP chief said that while he does not see a recession in the United States, a slowdown is “very likely.”

US President Donald J. Trump has pledged to impose broad reciprocal tariffs and additional sector-specific tariffs starting on April 2. 

Markets have been bracing for the potential impacts from inflationary pressures arising from these tariffs, which could prompt the US Federal Reserve to delay its own easing cycle.

The US central bank decided to hold interest rates steady on Wednesday, as expected. Fed Chair Jerome H. Powell said they are in no hurry to make any moves amid economic uncertainties.

Mr. Remolona said the tariff war would “absolutely” have spillover effects on the Philippines.   

“The tariff war is likely to slow down growth for everybody and then raise inflation for everybody. By how much, we don’t really know. But the bigger factor is the uncertainty itself,” he said.

However, this would only have a “modest” hit on the Philippine economy.

“We’ll be hit somewhat because we’re part of a global economy,” Mr. Remolona added.

Room for easing

Meanwhile, the BSP has space to deliver further policy easing amid low inflation, Nomura Global Markets Research said.

“Downside risks to growth, low inflation and high real rates mean there is still room to ease,” Nomura Global Markets Research analysts Sonal Varma and Si Ying Toh said in a report.

Nomura expects the central bank to cut rates by 75 bps this year.

“Disinflation is underway in Asia, with inflation falling within central bank targets across most countries,” it said.

Nomura said it also expects low inflation to be sustained.

“Underlying inflation has moderated by 1.2 percentage point compared to six months ago, and it has the second-highest real policy rate in the region, which suggests still-restrictive policy rates,” Nomura said.

“We expect another 75 bp in policy rate cuts, which would take the policy rate to 5% by end-2025.”

Meanwhile, ANZ Research said it expects the BSP to cut by 50 bps this year.

“For the remainder of 2025, we anticipate 50 bp of additional rate cuts in Indonesia, the Philippines, South Korea and Thailand,” it said in its latest research quarterly report.

“Monetary policy will be less efficacious, in our view. Monetary policy in the region has been a little more independent of the Fed than we had initially assumed,” it added.

Meanwhile, ANZ said it expects GDP to grow by 5.7% this year. This would miss the government’s 6-8% target for 2025.

It noted that household savings in the Asia region have been subpar.

“Savings shortfalls are high in Indonesia and the Philippines, where surveys revealed a drop in the share of income being allocated towards savings or a fall in the share of households with optimal savings.”

“Households are also becoming more circumspect on leverage.  The Philippines is the only exception where household borrowings are still growing at a solid pace. However, considering weak survey outlook on the financial condition of families, this lending cycle is unlikely to sustain in the long term.” — Luisa Maria Jacinta C. Jocson with Bloomberg

The value of the Philippines’ creative economy neared PHP 2 trillion in 2024, the statistics agency said on Thursday.

Data from the Philippine Statistics Authority (PSA) showed the gross value added (GVA) of the country’s creative industry-related activities expanded by 8.7% year on year to PHP 1.94 trillion in 2024 from P1.78 trillion in 2023.

However, the creative sector’s growth slowed from the 9.9% seen in 2023, and 13.3% in 2022.

With a GVA of P1.94 trillion, the creative economy accounted for 7.3% of the Philippines’ gross domestic product (GDP) at current prices in 2024, same as in 2023.

The creative economy is composed of industries such as film, digital services, research and development, media publishing, music, arts, entertainment, advertising, art galleries, museums and trade shows,” according to the PSA.

According to PSA data, symbols and images and other related activities had the largest share at 33% or PHP 640.29 billion of the sector’s total gross value added in 2024. These include manufacturing and trading of symbols and images in textiles, fashion, toys, footwear, furniture and other accessories.

Advertising, research and development, and other artistic service activities accounted for a 21% share or PHP 414.53 billion, while digital interactive goods and service activities contributed 20.6% or PHP 398.95 billion.

Meanwhile, media publishing and printing made up 10.4% or PHP 201.45 billion of the industry’s total gross value added.

In 2024, there were 7.51 million employed in the creative industries, rising by 3.9% from 7.23 million in the previous year.

“The share of employment in creative industries to the total employment in the country was at 15.4% in 2024,” the PSA said.

Of the total jobs in the creative sector, 36.6% are from traditional cultural expression activities, or equivalent to 2.75 million jobs.

Symbols and images and other related activities employed 2.21 million, representing 29.5% of the industry’s jobs.

This was followed by advertising, research and development, and other artistic service activities that accounted for 17.9% or 1.34 million of the total jobs in the creative economy.

“The creative economy has grown without any significant support from the government. It is crucial then that government intervention creates no blocks for this sector to grow,” Leonardo A. Lanzona, an economics professor at the Ateneo de Manila University said via Facebook Messenger on Thursday.

“Because of its comparative advantage, markets will be sufficient for this grow, but attempts must be made for greater learning by doing to increase the scale of production and reduce average costs.”

Mr. Lanzona noted that the creative industries should be exposed to international competition to “induce greater efficiency.”

“Given our natural creativity and inherent ability to adapt to changes, the creative economy is expected to grow. AI (artificial intelligence) should be seen as an opportunity not a barrier,” he said.

Meanwhile, Jose Jean Paolo A. Jalandoni, Marketing and Communications Manager of The Performing Arts and Recreation Center (PARC) Foundation said the impact of AI on the creative economy is “complex and multifaceted.”

“It presents both opportunities and challenges. AI’s ultimate impact on the creative economy will depend on how it’s implemented and regulated,” Mr. Jalandoni said.

However, he also flagged risks of job displacement, copyright issues, and ethical concerns arising from the use of AI.

William T. Guido, Chairman of The PARC Foundation Board of Trustees and Founder of the National Digital Arts Awards (NDAA), said the economy needs more than just talent to thrive.

“Talent is undeniably crucial, but equally important is the availability of work. PARC and the NDAA provide vital avenues for showcasing these artists to potential employers, creating a direct pipeline from training and recognition to sustainable careers,” Mr. Guido said.

He said the foundation helps Filipino creatives by investing in accessible arts education and creating platforms for exposure to build the “truly thriving creating economy.”

The PARC Foundation nonprofit organization founded in 2015, is committed to harnessing the power of performing arts to transform lives — especially the youth. – Aubrey Rose A. Inosante, Reporter

The Philippines slipped to 57^th place out of 147 countries in the latest World Happiness Report (WHR), despite showing an improvement in its overall happiness score.

In the latest WHR released on Thursday, the Philippines’ level of happiness rose to 6.107 out of 10 in 2025 from 6.048 previously.

The level of happiness is based on the self-assessed life evaluations averaged for the 2022-2024 period.

Last year’s report showed the Philippines ranked 53^rd out of 143 countries, marking its highest placement in four years.

The Philippines is the fourth happiest in the Southeast Asian region, behind Singapore (ranked 34^th with a score of 6.565), Vietnam (ranked 46^th with a score of 6.352), and Thailand (ranked 49^th with a score of 6.222).

The report is published by the Wellbeing Research Centre at the University of Oxford in partnership with Gallup and the United Nations Sustainable Development Solutions Network.

Nordic nations continued to be the happiest in the world, led by Finland for the eighth consecutive year, which scored 7.736 out of 10. Denmark ranked second, followed by Iceland, Sweden, the Netherlands, Costa Rica, Norway, Israel, Luxembourg and Mexico.

The US fell to its lowest-ever ranking of 24^th.

At the bottom is Afghanistan, which was once again the unhappiest country in the world. Also at the bottom were Sierra Leone, Lebanon, Malawi, and Zimbabwe.

Experts analyzed data across six key factors: gross domestic product per capita, social support, healthy life expectancy, freedom, generosity, and corruption.

“We previously found a global surge in benevolent acts during 2020, led by the helping of strangers, which continued through subsequent years. Last year, we found these acts to be prevalent in all generations, especially among Millennials and Gen Z. We suggested that this upsurge of benevolent acts might have led people to feel better about themselves and their neighbors,” the report said.

The WHR noted that acts of kindness remain 10% more frequent across all generations and in nearly all global regions compared with 2017–2019, even as trends gradually return to pre-pandemic levels.

“Global evidence on the perceived and actual return of lost wallets shows that people are much too pessimistic about the kindness of their communities compared to reality. Actual rates of wallet return are around twice as high as people expect,” the report said.

“Believing that others are willing to return your lost wallet is also shown to be a strong predictor of population happiness,” it added.

Over the past 15 years, inequality in happiness within countries has been increasing, while inequality in happiness between countries has remained relatively stable.

Despite this, WHR noted prosocial behavior, or altruism, declined in the Philippines. The decrease was largely associated with a decrease in donating money.

“The average change is -0.23 percentage points per year… the decrease was prevalently associated with a decrease in donating money,” it added.

“However, this increase masks two contrasting trends: on the one hand, an increase in the share of people helping others (0.56); on the other hand, a decrease in volunteering (-0.15).”

In terms of regional patterns of social connection, the WHR noted data from the Government Finance Statistics showed that while most young adults report having at least one social connection, a significant number are socially isolated.

Across 22 countries and regions, 17% of young adults report having no close relationships, including family and friends.

Japan stands out with over 30% of its young adult population experiencing social isolation. In contrast, countries like Nigeria, Egypt, and the Philippines report significantly lower rates, with less than 10% of young adults lacking close connections.

Other key findings were that 19% of young adults in 2023 across the world reported having no one they could count on for social support.

In addition, the study showed significant differences in meal-sharing rates exist worldwide, with meal-sharing having a profound impact on subjective well-being, comparable to the effects of income and unemployment.

Moreover, social connections are essential for the well-being of young adults, offering a protective buffer against the harmful effects of stress.

Deaths of despair are less common in countries where acts of kindness are more frequent.

In the US and parts of Europe, declining happiness and social trust have contributed to increasing political polarization and a rise in anti-system votes.

Sought for comment, Federation of Free Workers (FFW) Vice-President Julius H. Cainglet said the dip in altruistic behavior among Filipinos may be attributed to low wages.

“Workers, even if they are willing to give simply cannot give since they have nothing owing to the meager increase in wages over the past two years given by regional wage boards that have not been enough to cover the lost value of wages,” he said in a Viber chat.

The inability to meet their families’ basic needs has caused significant stress and anxiety among workers, he added.

“Having extra money would have helped by enabling workers and their families to engage in more social and recreational activities. Thus, increasing wages to living wage levels would greatly contribute to regaining the Country’s spot atop the prosocial behavior ratings and the happiness index,” he added. — Chloe Mari A. Hufana

Further monetary easing will be necessary to support economic growth, Finance Secretary Ralph G. Recto said, adding that there is a high likelihood the central bank will cut rates next month.

“Equally important, I suppose, is the reduction of interest rates. It would appear that, because inflation has been controlled in the Philippines… there is room for a rate cut in our next (meeting),” Mr. Recto, who is also a Monetary Board member, told Bloomberg in a televised interview on Wednesday.

“It’s a high probability that we could do a rate cut also for our next meeting,” he added.

The Monetary Board is set to have its next rate-setting meeting on April 10.

The central bank paused its easing cycle last month as it unexpectedly kept the key rate steady at 5.75%.

This after it reduced rates for three straight meetings late last year, for a total of 75 basis points (bps) worth of rate cuts.

Mr. Recto said there is room for up to 75 bps worth of rate reductions for this year.

“Hopefully, at the minimum 50 bps and probably 75 bps (cuts), for the year that will help propel growth, consumption and investments moving forward,” he added.   

Reducing borrowing costs could add at least 0.5% growth to gross domestic product (GDP), he said.

“If we could reduce it in the next two years by 150 bps, (it would probably be) even higher. Now, during the last decade, we were growing at an average of 6.4% when rates were roughly at about 3.4% to 3.9%. (Our) policy rate is 5.75%,” the Finance chief said.

Mr. Recto said further rate cuts, coupled with support investments, could drive Philippine growth up to 7% “or even higher later on.”

For this year, Mr. Recto said the Philippines will be able to meet its growth targets.

“We’re pretty confident that we would hit at least 6% growth. The World Bank, the IMF (International Monetary Fund), and many other institutions are saying that we’re on track to 6%,” he said, citing the country’s strong macroeconomic fundamentals, low unemployment and continued investment in infrastructure.

“We have elections also right now and during elections, there’s more spending, so we’re pretty confident we hit at the very least 6% this year,” Mr. Recto added.

The government is targeting 6-8% growth from this year until 2028.

The Philippines’ GDP grew by a slower-than-expected 5.2% in the fourth quarter, bringing the full-year growth to 5.6%. This was short of the government’s revised 6-6.5% full-year target.

Despite headwinds arising from slowing global growth, Mr. Recto said the Philippine economy is mostly driven by consumption.

“So far, our BPO industry is growing. Our overseas Filipino worker remittances continue to grow. We hope that’s not affected by these headwinds as well. Tourism is improving,” he said.

The recent arrest of former President Rodrigo R. Duterte is also unlikely to dampen investor sentiment.

Asked about the chance of political unrest after his arrest, Mr. Recto replied: “We don’t see that happening. Zero.”

“That’s nothing to do with our macroeconomic fundamentals. To begin with, there was a slight reduction in the stock exchange, but very subdued, but the peso appreciated on the day that he was arrested,” he said.

“It could also mean that the international community is looking at how important the rule of law is to us, and it’s a part of governance as well.”

Mr. Duterte, who led the Philippines from 2016 to 2022, was arrested on an International Criminal Court (ICC) warrant on charges of crimes against humanity.

Fiscal policy

Meanwhile, the Finance chief said the government is on track with fiscal consolidation efforts.

“We’re on the path. We surpass our revenue targets. Last year, we had the highest revenue-to-GDP ratio in the last 27 years. That’s very good.”

Latest data from the Treasury showed the National Government (NG) posted a PHP 68.4-billion budget surplus in January, 22.27% lower than the PHP 88-billion surfeit a year prior.

As of end-2024, the deficit as a share of GDP settled at 5.7%, lower than 6.2% at end-2023. The NG is looking to bring the deficit-to-GDP ratio to 5.3% this year and further to 3.7% by 2028.

The Finance department will also continue to privatize idle state assets, such as the Caliraya-Botocan-Kalayaan hydroelectric power plant.

“We’re opening up also for retail investors, because there are many government assets that are nonperforming, and it costs the government to maintain them so might as well privatize that.”

“Even small properties that are bought by the private sector or even individuals, that could create more value for the economy.”

These privatization efforts are expected to generate around PHP 100-billion revenues. — Luisa Maria Jacinta C. Jocson

The Philippines’ balance of payments (BoP) position swung to a surplus in February, the Bangko Sentral ng Pilipinas (BSP) said on Wednesday.

Data from the BSP showed the BoP registered a surplus of USD 3.1 billion in February, a turnaround from the USD 4.1-billion deficit in January and USD 196-million gap in the same month a year ago.

This was also the first surplus in five months or since the USD 3.53-billion surfeit posted in September.

The BoP measures the country’s transactions with the rest of the world. A surplus shows that more money entered the Philippines, while a deficit means more funds left.

“The BoP surplus reflected the National Government’s (NG) net foreign currency deposits with the BSP which include proceeds from Republic of the Philippine global bonds, and net income from the BSP’s foreign investments,” the central bank said.

At its end-February position, the BoP reflected a final gross international reserve (GIR) level of USD 107.4 billion, higher than USD 103.3 billion as of end-January.

The dollar reserves were enough to cover 3.8 times the country’s short-term external debt based on residual maturity.

It was also equivalent to 7.4 months’ worth of imports of goods and payments of services and primary income.

An ample level of foreign exchange buffers safeguards an economy from market volatility and is an assurance of the country’s capability to pay debts in the event of an economic downturn.

“It’s quite impressive to see such a significant turnaround in the BoP position,” Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas said in a Viber message.

This indicates a “substantial improvement in the country’s economic activities,” he added.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the surplus in February can be largely attributed to the NG’s first global bond offering of the year.

In January, the NG raised USD 3.3 billion from the sale of 10-year and 25-year fixed-rate global bonds and seven-year euro sustainability bonds.

Mr. Ricafort also noted the continued gains in gold holdings as gold prices hit new highs. Foreign investments also showed gains amid higher prices of US Treasury bonds, he added.

Meanwhile, Bank of the Philippine Islands Lead Economist Emilio S. Neri, Jr. said the pause in the central bank’s easing cycle also supported the BoP surplus.

“We think it helped that the BSP did not cut rates last February. This likely attracted foreign flows into both the local bond and equity markets last month helping, in turn, mitigate the persistent deficits in the current account,” he added.

The Monetary Board last month opted to keep the key rate steady at 5.75% after three straight rate cuts last year.

Meanwhile, the country’s BoP position stood at a USD 992-million deficit in the first two months, slightly higher than the USD 936-million gap in the comparable year-ago period.

“Based on preliminary data, the year-to-date deficit reflected mainly the widening trade in goods deficit and net outflows from foreign portfolio investments but was partially offset by net receipts from foreign borrowings by the NG and personal remittances,” the BSP said.

Latest data from the local statistics authority showed the trade deficit widened to USD 5.09 billion in January from the USD 4.14-billion deficit in December, its widest gap in three months.

“The cumulative deficit for the first two months of the year suggests that there are still underlying challenges that need to be addressed,” Mr. Ravelas said.

“This mixed result highlights the importance of maintaining a balanced approach to economic policies to sustain positive trends while mitigating deficits,” he added.

This year, the BSP expects the country’s BoP position to end at a USD 2.1-billion surplus, equivalent to 0.4% of gross domestic product. – Luisa Maria Jacinta C. Jocson, Reporter