THE country’s debt service burden surged by 31.5 percent to $2.12 billion in the first two months of the year from $1.62 billion a year earlier, preliminary Bangko Sentral ng Pilipinas (BSP) data showed.
Principal payments climbed to $884 million from $386 million while interest payments also rose to $1.24 billion from $1.23 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.
Asked to comment, Reyes Tacandong & Co. senior adviser Jonathan Ravelas said the increase was “less about a sudden deterioration and more about timing and structure.”
“From a macro perspective, this is manageable — but it’s a signal to stay disciplined,” he added.
“The Philippines still needs to ensure strong foreign exchange earnings, particularly from exports and remittances, to comfortably service these obligations,” Ravelas continued.
“The key risk to watch is liquidity — if global financial conditions tighten again, refinancing could become more expensive.”
External debt declined to $147.65 billion in end-December 2025 from $149.09 billion three months earlier.
The decrease was mainly driven by nonresidents selling a net $2.28 billion worth of Philippine debt securities. Lower dollar valuations of foreign-currency-denominated borrowings also reduced the debt stock by $659.38 million.
As a share of gross domestic product (GDP), external debt slightly improved to 30.3 percent from 30.9 percent in the previous quarter, indicating a marginal improvement in debt manageability.
