Lower principal and interest payments in October 2025 pushed the Philippines’ foreign debt service burden down to $11.02 billion from $14.30 billion in the same period last year, Bangko Sentral ng Pilipinas (BSP) data showed Monday.
The 22.94-percent year-on-year decline was due to a sharp drop in principal payments and a single-digit decrease in interest payments, according to the BSP.
Principal payments fell 41.04 percent to $4.51 billion in October from $7.65 billion previously, while interest payments decreased 2.09 percent to $6.51 billion from $6.65 billion in 2024.
The BSP said the October external debt service burden was equivalent to 2.9 percent of gross domestic product as of end-September, while its ratio to gross national income stood at 2.5 percent.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the country’s foreign debt servicing eased amid lower foreign debt maturities and a foreign borrowing reduction in the government’s total borrowing mix to better manage exchange risks.
Ricafort said the US Federal Reserve’s 175 basis points worth of interest rate cuts since September 2024 also helped lessen the country’s interest payments on external debt.
Ricafort said risks of foreign exchange losses would still warrant a tempered approach in increasing foreign borrowings to finance the budget deficit, while wider deficits could necessitate higher external borrowings by the government.
The BSP earlier reported that the Philippines’ outstanding external debt climbed to $149.09 billion as of the third quarter of 2025, a marginal 0.1 percent increase from the previous quarter.
The BSP said the debt level “remained broadly stable” in the third quarter and that the country’s external obligations stayed manageable, supported by solid economic conditions and prudent policies.
The slight quarter-on-quarter increase was led by the net acquisition of Philippine debt securities by non-resident investors, totaling $1.47 billion. This was partially offset by net repayments of $764.56 million and valuation adjustments of $442.50 million due to the appreciation of the US dollar during the reference period.
Data showed that on a year-on-year basis, the external debt saw a larger increase of 6.8 percent. This was attributed to new borrowings, including bond issuances by the government amounting to $3.33 billion and external financing secured by local banks totaling $1.58 billion.
