PH external debt service up as principal payments climb
The Philippines’ debt-service burden rose in the first half of 2026 as a larger share of its foreign obligations came due, even as the country’s ability to meet those payments remained relatively strong.
The government and private sector paid a combined $7.3 billion to foreign creditors from January through June, nearly 3 percent more than in the same period last year, according to data from the Bangko Sentral ng Pilipinas (BSP).
Principal payments rose nearly 10 percent to $3.4 billion, while interest payments declined by almost 2 percent to $3.9 billion.
The increase came as the country’s external debt continued to grow. As of June, the Philippines owed nearly $155 billion to foreign creditors, up 4 percent from a year earlier, driven largely by global bond issuances and loans of the national government for budgetary and development financing, the central bank said.
The figures cover a period of heightened global financial volatility, as the conflict involving the United States, Israel and Iran rattled markets and sent oil prices higher. The resulting uncertainty complicated the inflation outlook, weighed on the Philippine peso and pushed global bond yields higher.
The turmoil also added to the policy challenges facing the BSP, which last month raised its benchmark interest rate by a quarter percentage point to 5 percent. It was the third increase in the current tightening cycle, which the central bank described as a preemptive response to emerging inflation risks from a possible severe El Niño and higher wages.
Despite the increase in debt service, the Philippines’ capacity to meet its foreign obligations showed some improvement.
Debt service as a share of export receipts fell to 21 percent from 22.3 percent a year earlier. In other words, the country spent about 21 cents of every dollar earned from exports on servicing its foreign debt, compared with more than 22 cents previously.
The country’s gross international reserves, meanwhile, were equivalent to about 14 times its debt-service payments. The reserves serve as a buffer against external shocks and provide the country with resources to meet foreign obligations.
The BSP is responsible for compiling and publishing the Philippines’ external debt statistics under a presidential order, part of the government’s effort to improve transparency and provide information that can help borrowers, lenders and policymakers assess debt sustainability and broader economic stability.
