THE country’s debt service burden rose by 3.02 percent to $7.29 billion in the first six months of the year from $7.08 billion a year earlier, preliminary Bangko Sentral ng Pilipinas (BSP) data showed.
Principal payments climbed to $3.38 billion from $3.09 billion a year earlier, while interest payments dropped to $3.92 billion from $3.99 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.
Philippine Institute for Development Studies (PIDS) senior fellow John Paolo Rivera said the increase largely reflects additional government and private-sector borrowings, including financing for development and funding requirements, alongside valuation and market-related factors.
“The more important issue is debt sustainability rather than the absolute level alone,” Rivera said.
“Moving forward, the burden could rise further with continued borrowing and peso weakness, which makes forex currency obligations more costly in peso terms,” he added.
External debt rose to $154.93 billion at end-June 2026 from $147.35 billion a quarter earlier. The central bank said that level “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.
