PHL external debt grows 7.3% in 2025

OUTSTANDING EXTERNAL debt rose 7.3% in 2025 as the National Government (NG) and the private sector took on new obligations last year, the Bangko Sentral ng Pilipinas (BSP) said.

The BSP said the debt stock had risen to $147.651 billion by the end of 2025.

“This was driven primarily by new borrowing, which included bond issues by the National Government amounting to $3.29 billion and external financing tapped by private-sector banks amounting to $3.72 billion,” the central bank said in a statement late Friday.

Net valuation adjustments amounted to $1.34 billion, while net acquisition of Philippine debt securities by non-residents hit $1.23 billion.

The debt tally at the end of December was 0.97% lower than the record of $149.093 billion set in the three months to September.

“External debt fell to $147.65 billion in December 2025 from $149.09 billion in September 2025, as non-residents on a net basis sold $2.28 billion worth of Philippine debt securities,” the BSP said.

“Debt manageability also improved slightly amid weaker-than-expected economic growth and cautious market sentiment,” it added.

External debt refers to all types of borrowing by residents from nonresidents.

According to the BSP, net availments amounted to $1.44 billion in the fourth quarter, tempered by net valuation adjustments during the period.

“Net valuation adjustments reflecting lower dollar valuations of borrowing denominated in other currencies also reduced the debt stock by $659.38 million,” the central bank said.

In December, weak market sentiment due to the corruption scandal dragged the peso to between P58 to P59 against the dollar.

According to the Bankers Association of the Philippines, the peso unit fell eight centavos to close at P58.79 to the dollar on Dec. 29, the last trading day of 2025. It was also 1.61% weaker than its P57.845 close on Dec. 27, 2024.

Philippine foreign debt was equivalent to 30.3% of  gross domestic product (GDP) at the end of December, lower than the 30.9% ratio at the end of September.

The BSP said public-sector obligations totaled $94.867 billion at year’s end, making up the bulk of the national debt and up 11.16% from 2024 levels.

The NG acquired debt amounting to $89.028 billion, followed by state banks with $5.839 billion and the BSP with $3.906 billion.

Private-sector obligations rose 0.95% to $52.784 billion.

The Philippines took out the most loans from Japan with $16.583 billion, followed by China with $4.9 billion, the UK with $4.003 billion, the US with $2.329 billion, France with $2.31 billion and Germany with $1.591 billion.

Dollar-denominated debt accounted for $106.127 billion of the borrowing, while yen debt comprised $11.398 billion of the total.

Meanwhile, short-term external debt based on the remaining maturity concept (STRM) rose 1.67% quarter on quarter to $26.80 billion in the three months to December.

“Gross international reserves of $110.83 billion also provided adequate buffers to absorb these near-term obligations, reflecting 4.14 times cover and indicating a strong reserve adequacy position relative to emerging economy peers,” the BSP said.

STRM debt is composed of loans with original maturities of one year or less plus amortization on medium and long-term accounts falling due within the next 12 months.

The BSP also noted that lower principal and interest payments helped the Philippines’ debt service ratio ease to 8.3% in 2025 from 11.5% in 2024. This ratio measures a country’s capacity to meet its obligations based on its foreign exchange earnings. — Katherine K. Chan