THE country’s debt service burden fell by 22.9 percent to $11.02 billion as of end-October from $14.3 billion a year earlier, preliminary Bangko Sentral ng Pilipinas (BSP) data showed.
Principal payments declined to $4.51 billion from $7.65 billion, while interest payments also dropped to $6.51 billion from $6.62 billion.
The debt service burden covers principal and interest payments on medium- to long-term credits such as those from the International Monetary Fund, loans under Paris Club agreements and debt restructuring by commercial banks, along with new money facilities.
It also includes interest payments on banks’ and nonbanks’ fixed and revolving short-term liabilities but excludes prepayments for future foreign loan maturities and principal payments on short-term obligations.
Outstanding external debt stood at $149.09 billion as of end-September, up 6.7 percent from $139.64 billion in the previous quarter.
As a share of gross domestic product, external debt was at 30.9 percent, slightly up from 30.6 percent three months earlier.
The central bank said external debt “remained manageable, supported by solid economic conditions and prudent policies.”
Public sector external debt totaled $96.29 billion, up from $86.88 billion as of end-June, while private sector debt also increased to $52.79 billion from $52.76 billion.
Sought for comment, Rizal Commercial Banking Corp. chief economist Michael Ricafort said the overall decline as of end-October was mainly due to smaller foreign debt maturities and a lower share of foreign borrowings in the government’s total debt.
“Going forward, risk of forex losses would still lead to a tempered approach in increasing foreign borrowings to finance the budget deficit,” he said.
The borrowing mix for next year remains skewed toward domestic sources at 77 percent, with the remaining 23 percent to come from abroad.
The government is planning to borrow P2.68 trillion this year to finance its programs and projects, slightly up from the P2.6 trillion last year.
Most will come from the domestic debt market at P2.05 trillion, down from the P2.11 trillion programmed for 2025.
The remaining P627.1 billion will come from external sources, up from 2025’s P488.17 billion. This comprises program loans (P263.3 billion), project loans (P61.7 billion), and bonds and other inflows (P302.1 billion).