The Bangko Sentral ng Pilipinas reported that the Philippines’ outstanding external debt edged lower in the fourth quarter of 2025, offering a modest improvement in debt manageability as global investors trimmed their exposure to Philippine securities.
Total external debt slipped 1 percent to USD147.65 billion in December from USD149.09 billion in September, largely due to net selling by non-resident investors of about USD2.28 billion worth of Philippine debt securities.
Additional relief came from valuation adjustments. The stronger US dollar reduced the value of borrowings denominated in other currencies, trimming the debt stock by about USD659 million.
These factors more than offset fresh external borrowings during the quarter, which totaled USD1.44 billion.
The decline nudged the country’s external debt-to-gross domestic product ratio—a key gauge of debt sustainability—down to 30.3 percent from 30.9 percent in the previous quarter. The ratio remains relatively manageable compared with many emerging economies.
Short-term external obligations, however, ticked slightly higher. Debt based on the remaining maturity concept rose to USD26.8 billion from USD26.36 billion in the previous quarter.
Even so, the Philippines’ foreign exchange buffer remains substantial. Gross international reserves stood at USD110.83 billion at end-December, providing 4.14 times cover for short-term external debt—a level widely viewed by analysts as comfortable protection against external shocks.
Another key metric also improved. The country’s debt service ratio, which measures the share of export earnings used to repay external loans, fell to 8.3 percent from 11.5 percent a year earlier, reflecting lower principal and interest payments.
Despite the quarterly dip, the country’s external debt still rose 7.3 percent from a year earlier, driven by new borrowings.
These included USD3.29 billion in international bond issuances by the national government and USD3.72 billion in external financing tapped by private sector banks.
The data suggest the Philippines continues to rely on external funding to support growth, but its reserve buffers and manageable debt ratios help keep investor concerns largely in check.
