The Philippines’ outstanding external debt, or borrowings owed by residents to non-residents, moderately increased in the second quarter of the year from the level seen in the previous quarter, mainly due to the weakening of the US dollar.

External debt reached $148.87 billion at end-June, up 1.5 percent from the previous quarter.

The increase in external debt was primarily due to valuation effects from the depreciation of the US dollar. This increased the US dollar-equivalent of borrowings denominated in other currencies by $1.49 billion.

The net acquisition of Philippine debt securities amounting to $660.96 million also contributed to the increase, while net repayments amounting to $315.67 million partially tempered the increase in the country’s external debt.

External debt stock was equivalent to 31.2 percent of gross domestic product, slightly better than the 31.5 percent recorded in the previous quarter.

Metrics show that the external debt stock remained sustainable. As of end-June, short-term external debt based on the remaining maturity concept stood at $28.63 billion.

This level remains well-covered by gross international reserves (GIR) of $106 billion, providing 3.7 times cover for short-term obligations.

Meanwhile, debt service ratio, another indicator of capacity to service debt that compares the country’s loan payments with its income from exports and other inflows, improved to 8.7 percent from 9.8 percent a year earlier. This resulted from lower principal and interest payments by resident borrowers as of the second quarter of 2025.

On a year-on-year basis, external debt increased by 14.4 percent. The increase in external debt was driven primarily by borrowings, which included bond issuances by the national government amounting to $5.83 billion and external financing tapped by local banks amounting to $3.44 billion. Bangko Sentral ng Pilipinas