The Philippines saw a growth in its outstanding external debt in the first quarter of 2025, based on preliminary data from the Bangko Sentral ng Pilipinas (BSP).

External debt, which includes all borrowings by Philippine residents from non-residents, increased by 14% year-on-year to reach $146.75 billion by the end of March. This amount is equivalent to 31.5% of the country’s GDP. Despite a 29.8% increase from the previous quarter, the BSP mentioned that the debt levels still indicate the country's ability to meet its obligations.

The short-term external debt of the Philippines, consisting of obligations due within the next year, was recorded at $32.67 billion.

Data from the Bureau of the Treasury revealed that the total debt of the country reached P16.68 trillion as of March-end, with external obligations making up 31.8% of the total debt stock.

The BSP attributed the rise in external obligations to the national government's fundraising efforts to support infrastructure projects and other budgetary needs. The government raised $5.06 billion through global bonds issuance and loans from foreign development institutions. Local banks also tapped into offshore markets for short-term financing during the first quarter.

In terms of debt servicing, the Philippines' debt service ratio decreased from 9% in Q1 2025 to 8.4% a year later. This ratio measures the country's foreign exchange earnings' sufficiency to meet maturing obligations.

The growth in external debt was primarily driven by the national government's $7.83 billion bond issuances and local banks' borrowings of $6.14 billion. The BSP noted that the country's gross international reserves (GIR) amounting to $106.67 billion provide 3.27 times cover for short-term obligations.

The GIR represents the BSP's foreign assets, mainly held as investments in foreign-issued securities, foreign exchange, and monetary gold. A sufficient GIR level can finance at least three months' worth of the country's imports, services payments, and primary income. It should also cover at least 100% of the foreign debt payments due within the next 12 months.

The Philippine government plans to borrow P2.55 trillion this year, with P507 billion coming from external sources.