7-month PH external debt payments up 5% to $8.2B

The Philippines’ foreign debt servicing bill grew in the January to July period as more obligations fell due, even as the country’s capacity to meet those payments remained relatively strong.

The government and private sector paid a combined $8.2 billion to foreign creditors in the first seven months, 5 percent more than in the same period last year, according to data from the Bangko Sentral ng Pilipinas (BSP).

The amount accounted for 3 percent of gross domestic product (GDP), unchanged from the comparable period in 2025.

It was also equivalent to 20.3 percent of total export shipments, better than 21 percent previously. In other words, the country spent about 20 cents of every dollar earned from exports on servicing its foreign debt, compared with 21 cents previously.

Broken down, principal payments grew nearly 13 percent to $3.6 billion, while interest costs were almost flat at $4.7 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 50 basis points to 5.5 percent. It was the fourth increase in the current tightening cycle, as policymakers tackle persistent inflationary pressures.

Meanwhile, the Philippines’ foreign exchange reserves dropped to a near four-year low as of October to P97.4 billion, though the level could still cover about 3.1 times the country’s short-term external debt based on residual maturity.

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.