Philippines External Debt Hits New Record Near $155 Billion

OUTSTANDING external debt neared $155 billion to hit a new record, with the National Government (NG) and the private sector taking on new obligations, the Bangko Sentral ng Pilipinas (BSP) said. The BSP reported that the debt stock rose to $154.932 billion in the second quarter, up 5.14% from the first quarter. “Outstanding external debt increased to $154.93 billion at end-June 2026 from $147.35 billion a quarter earlier but remained broadly manageable based on key indicators,” the central bank said in a statement late Friday. The rise in external debt was driven by NG and private domestic bank net borrowing, according to the BSP. “This was partly offset by negative FX revaluation effects arising from the US dollar appreciation, and a modest decline in non-resident holdings of Philippine debt securities,” it added. Year on year, the debt stock rose 4.07%, which the BSP attributed to NG global bond issuances and the loans it took out to finance its budget deficit. The BSP’s external debt data cover borrowings of Philippine residents from nonresident creditors, regardless of sector, maturity, creditor type, debt instruments or currency denomination. Its external debt tally is based on reports submitted by borrowers, banks, and major foreign creditors. The second-quarter total was equivalent to 31.6% of gross domestic product, exceeding the 30% posted at the end of March as growth in indebtedness outpaced economic output. “Liquidity buffers remained strong despite higher near-term obligations,” the BSP added. Public-sector obligations made up the bulk of the national debt. These obligations grew 3.01% to $98.535 billion at the end of June from $95.655 billion a quarter earlier. The NG acquired debt amounting to $92.848 billion, followed by state banks with $5.687 billion and the BSP with $3.868 billion. Meanwhile, the private sector’s outstanding external debt increased 9.09% quarter on quarter to $56.397 billion. The Philippines took out the most loans from Japan totaling $16.553 billion, followed by the UK ($7.436 billion), China ($4.578 billion), France ($2.357 billion), the US ($1.959 billion), and Germany ($1.372 billion). Dollar-denominated borrowing accounted for $113.096 billion of the debt pile during the period, with yen borrowing amounting to $13.249 billion. The debt service ratio to eased 9% from 9.2% a year earlier. This ratio measures a country’s capacity to meet its obligations based on its foreign exchange earnings. Meanwhile, short-term external debt based on the remaining maturity concept (STRM) hit $31.64 billion in the second quarter. Gross international reserves of $104.745 billion during the period remained sufficient to cover about 3.7 times the STRM. “This placed the GIR-to-STRM ratio at 3.31, indicating sufficient resources to cover external debt obligations falling due over the next 12 months,” the central bank said. “Reserve coverage remained robust relative to other emerging economy peers.” 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. “Overall, the external debt position remained broadly manageable, underpinned by sound solvency indicators and adequate liquidity buffers,” the central bank said. — Katherine K. Chan