Philippine external debt rises slightly to USD 149B in Q3

The Philippines’ external debt inched up to USD 149.09 billion at the end of the third quarter (Q3) of 2025, marking a marginal quarter-on-quarter increase of 0.1 percent, according to the Bangko Sentral ng Pilipinas (BSP).

The rise was attributed mainly to the stronger participation of non-resident investors in the country’s domestic capital markets.

Non-residents acquired USD 1.47 billion in Philippine debt securities, more than offsetting net repayments of USD 764.56 million and valuation losses of USD 442.50 million brought about by the appreciation of the US dollar during the quarter.

Debt-to-GDP ratio improves

The country’s external debt remains sustainable, with the debt-to-gross domestic product (GDP) ratio improving to 30.9 percent in Q3 2025 from 31.2 percent in the previous quarter.

A lower debt-to-GDP ratio indicates that the economy is expanding faster than its external obligations.

“Metrics show that the external obligations remained manageable, supported by solid economic conditions and prudent policies,” the BSP noted in its Dec. 12 press release.

As of end-September 2025, the country’s short-term external debt—based on the remaining maturity concept—stood at USD 27.16 billion.

This amount remains well-covered by the gross international reserves (GIR) of USD 109.06 billion, providing a GIR-to-short-term debt cover of 4.01 times, up from 3.85 times in the previous quarter.

This ratio exceeds that of many emerging market peers and indicates the Philippines’ capacity to repay its short-term obligations even during periods of external volatility.

Debt service burden falls

The debt service ratio—a key indicator measuring the share of export and income earnings used to service foreign debt—improved to 8.5 percent in Q3 2025 from 11.5 percent a year earlier.

This improvement was largely due to lower principal and interest payments by resident borrowers during the period.

A lower debt service ratio is considered favorable, as it means a smaller portion of foreign exchange earnings is being used to pay off debt, allowing for more resources to support domestic economic growth.

On a year-on-year basis, external debt grew by 6.8 percent, primarily due to new borrowings by the national government and local banks. These included:

• USD 3.33 billion in bond issuances by the National Government
• USD 1.58 billion in new external financing obtained by domestic banks

Sectoral and creditor profile

As of Q3 2025, public sector debt stood at USD 96.30 billion, while private sector debt amounted to USD 52.80 billion

The country’s external liabilities were primarily denominated in US dollars (USD 105.68 billion or 70.9%), Japanese yen (USD 11.39 billion or 7.6%), Special Drawing Rights (SDRs) (USD 3.90 billion), and Other currencies (USD 28.13 billion).

Top creditors included multilateral institutions such as the Asian Development Bank and the International Bank for Reconstruction and Development, with a combined total of over USD 32.67 billion, and bondholders/noteholders who held USD 51.21 billion in debt securities.

Despite the increase in absolute debt levels, the BSP emphasized that the country’s external debt metrics remain “well within prudent thresholds,” thanks to sound macroeconomic fundamentals and active debt management.

The central bank said it will continue to monitor global developments and maintain policies that ensure debt sustainability while supporting economic recovery.