The country’s net external liabilities — the difference between what the country owes to foreign entities and what it owns abroad — fell by 9.3 percent in the third quarter of 2025, according to preliminary data from the Bangko Sentral ng Pilipinas (BSP).
The amount declined from ₱3.6 trillion in the second quarter to ₱3.3 trillion in the third quarter, indicating that the country’s financial position with the rest of the world has improved.
The improvement was largely driven by higher investments abroad by the BSP and local banks, which strengthened their overall financial standing. At the same time, the national government increased its borrowing from foreign sources and saw more of its securities held by nonresidents, which partly offset the gains from the banking sector.
For ordinary Filipinos, this development is generally a positive sign. A lower level of net external liabilities means the country is less exposed to risks from global financial shocks. This can help support a more stable economy, which in turn may keep inflation and interest rates from rising too sharply. It can also reduce pressure on the peso, helping prevent sudden increases in the cost of imported goods such as fuel and food.
Although government borrowing increased, most of its obligations remain in pesos, accounting for 68.9 percent of total debt. This reduces the country’s vulnerability to exchange rate swings and makes it easier for the government to manage its repayments.
Overall, the decline in net external liabilities points to a stronger financial position for the Philippines, supported mainly by the banking sector. While this suggests a more stable economic environment, the rise in government borrowing highlights the need to maintain a careful balance to ensure debt remains manageable over the long term.
