THE country’s debt service burden rose by 5.2 percent to $8.25 billion in the first seven months of the year from $7.84 billion a year earlier, preliminary central bank data showed.
The bulk came from interest payments, which were recorded at $4.673 billion, lower than the $4.675 billion recorded in the same period last year.
Principal payments, on the other hand, continued to increase to $3.58 billion from $3.17 billion in January to July 2025.
The debt service burden covers principal and interest payments on medium- to long-term credits, including those from the International Monetary Fund and new money facilities.
It also includes interest payments on banks’ and nonbanks’ short-term liabilities but excludes principal payments on such obligations and prepayments for future foreign loan maturities.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the higher external debt ratio signals wider budget deficits and reflects the government’s increased reliance on borrowings to finance its spending.
“External debt servicing also increased due to higher global and local interest rates in recent years, especially in 2026, largely brought about by the war on Middle East that led to the sharp increase in global crude oil prices,” Ricafort said.
External debt rose to $154.93 billion at end-June 2026 from $147.35 billion a quarter earlier; however, the central bank said it “remained broadly manageable based on key indicators.”
“The external debt position remained broadly manageable, underpinned by sound solvency indicators and adequate liquidity buffers,” the central bank said.
Public sector external debt totaled $98.54 billion, up from $94.80 billion, while private sector debt also rose to $56.39 billion from $54.07 billion.
As a share of gross domestic product (GDP), external debt increased to 31.6 percent from 30.0 percent in the previous quarter.
“The increase reflected the faster growth in external debt relative to economic output during the quarter,” the BSP said.
“Liquidity buffers remained strong despite higher near-term obligations,” it added.
