THE Philippines’ outstanding external debt declined slightly in the first quarter despite fresh borrowings, the Bangko Sentral ng Pilipinas (BSP) reported late Thursday.
External debt stood at $147.35 billion as of end-March 2026, down from $147.65 billion at the end of last year.
“The slight quarter-on-quarter decline in external debt was driven by lower non-resident holdings of Philippine debt securities, reflecting more cautious investor sentiment and tighter financing conditions for emerging markets during the quarter,” the BSP said.
External debt as a share of gross domestic product improved slightly to 30.0 percent from 30.3 percent in the previous quarter.
“Key debt indicators remained sound,” the BSP said, adding that the country’s external debt position remained manageable despite slower economic growth during the period.
Growth in the first quarter was just 2.8 percent, markedly lower than the 5.4 percent recorded in the same period last year and 3.0 percent three months earlier.
Short-term external debt based on the remaining maturity concept — which covers obligations with original maturities of one year or less as well as principal payments on medium- and long-term debt due within the next 12 months — declined to $25.50 billion.
Meanwhile, the BSP said that the country’s gross international reserves stood at $106.64 billion during the quarter, equivalent to 4.18 times the short-term debt obligations falling due over the next year. This improved from the 4.13x recorded in the previous quarter.
The central bank said the reserve position indicated a “strong capacity to meet near-term external commitments and a robust reserve adequacy position relative to emerging economy peers.”
The country’s debt service ratio — which measures principal and interest payments as a percentage of receipts from exports of goods and services and primary income — settled at 9.5 percent.
While higher than the 8.5 percent recorded a year earlier due to increased principal repayments, the BSP said the ratio remained “moderate.”
Year-on-year, however, the country’s external debt stock was slightly higher than the $146.74 billion recorded as of end-March 2025.
“The rise was driven mainly by new borrowings by the national government and private sector, reflecting ongoing financing for development priorities and continued support for trade and business activity,” the central bank said.
Public sector external debt climbed to $95.66 billion from $94.87 billion three months earlier, accounting for nearly two-thirds of the country’s total external obligations.
Private sector debt, meanwhile, eased to $51.70 billion from $52.78 billion, largely due to lower borrowings by banks.
By maturity profile, medium- and long-term obligations remained the biggest component of the country’s external debt stock at $129.27 billion, accounting for almost 88 percent of total debt. Short-term obligations fell to $18.09 billion from $20.23 billion in the previous quarter.
Multilateral creditors remained the largest official lenders, with obligations amounting to $42.63 billion, followed by bondholders and noteholders at $47.53 billion.
Japan remained the Philippines’ largest single-country creditor, accounting for $16.27 billion in outstanding obligations, followed by the United Kingdom at $4.87 billion, China at $4.55 billion, France at $2.43 billion and the United States at $2.48 billion.
In terms of currency denomination, US dollar-denominated obligations comprised the bulk of the country’s external debt at $106.74 billion while Japanese yen-denominated debt totaled $12.63 billion.
“Overall, the external debt profile remains resilient, with developments primarily reflecting market-driven adjustments and financing requirements,” the central bank said.
