The Philippines’ outstanding external debt[1] declined by 1.0 percent in Q4 2025 compared with the previous quarter. Debt manageability also slightly improved amid weaker-than-expected economic growth and cautious market sentiment.
External debt fell to US$147.65 billion in December 2025 from US$149.09 billion in September 2025, as non-residents on a net basis sold US$2.28 billion worth of Philippine debt securities.
Net valuation adjustments reflecting lower US dollar valuations of borrowings denominated in other currencies also reduced the debt stock by US$659.38 million.
These developments partly offset the effect of net availments totaling US$1.44 billion during the quarter.
The external debt as a percentage of the gross domestic product (GDP), a key indicator of debt manageability, slightly improved to 30.3 percent from 30.9 percent in the previous quarter.
Short-term external debt based on the remaining maturity concept (STRM)[2] stood at US$26.80 billion, up from US$26.36 billion in the previous quarter.
The country’s gross international reserves (GIR) of US$110.83 billion also provided adequate buffers to absorb these near-term obligations, reflecting 4.14 times cover and indicating a strong reserve adequacy position relative to emerging economy peers.[3]
The debt service ratio,[4] another indicator of capacity to service debt that compares the country’s loan payments with its income from exports and other inflows, improved to 8.3 percent from 11.5 percent a year earlier due to lower principal and interest payments during the period.
Year-on-year, external debt increased by 7.3 percent. This was driven primarily by new borrowings, which included bond issuances by the National Government amounting to US$3.29 billion and external financing tapped by private sector banks amounting to US$3.72 billion.
The increase also resulted from net valuation adjustments of US$1.34 billion, and net acquisition of Philippine debt securities by non-residents amounting to US$1.23 billion. PR