Foreign debt slips to $147.65 billion in Q4

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March 16, 2026 | 12:00am

MANILA, Philippines — The country’s foreign debt edged lower in the fourth quarter of 2025, reflecting net sales of Philippine debt securities by non-residents and favorable currency movements, according to the Bangko Sentral ng Pilipinas (BSP).

Data from the central bank showed that the country’s external obligations declined by one percent to $147.65 billion as of end-December 2025 from $149.09 billion in September 2025.

The BSP said the decline was mainly driven by foreign investors selling $2.28 billion worth of Philippine debt securities during the quarter.

Currency movements also helped reduce the overall debt stock. Net valuation adjustments reflecting the lower dollar value of borrowings denominated in other currencies trimmed the country’s external obligations by $659.38 million.

These factors partly offset net availments totaling $1.44 billion during the quarter.

The BSP noted that the country’s debt indicators showed a modest improvement during the period despite weaker-than-expected economic growth and cautious market sentiment.

External debt as a share of gross domestic product, a key measure of debt sustainability, improved slightly to 30.3 percent in the fourth quarter from 30.9 percent in the previous quarter.

Meanwhile, short-term external debt based on the remaining maturity concept rose to $26.80 billion from $26.36 billion in the previous quarter.

The BSP said the country continues to have ample gross international reserves (GIR) to cover these near-term obligations.

“The country’s GIR 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 central bank said.

Another indicator of the country’s ability to meet external obligations also improved. The debt service ratio, which measures loan payments relative to export and income receipts, fell to 8.3 percent from 11.5 percent a year earlier, reflecting lower principal and interest payments during the period.

Despite the quarter-on-quarter decline, the BSP said the country’s external debt remained higher compared with a year earlier.

On a year-on-year basis, external debt grew by 7.3 percent from $137.63 billion, largely due to fresh borrowings that included $3.29 billion in bond issuances by the national government and $3.72 billion in external financing tapped by private sector banks.

The increase was also driven by net valuation adjustments of $1.34 billion and net acquisition of Philippine debt securities by non-residents amounting to $1.23 billion.

BSP data showed that the public sector remained the largest borrower, accounting for $94.87 billion of the country’s external debt stock, while the private sector owed $52.78 billion as of end-2025.

Overall, the BSP said the country’s external debt position remained manageable, supported by strong reserve buffers and improving debt service indicators.