The Philippines trimmed its external debt in the first quarter of 2026, while key indicators showed the country remained in a strong position to meet its financial obligations despite global economic uncertainties, the Bangko Sentral ng Pilipinas (BSP) reported.
Outstanding external debt fell slightly to $147.35 billion at the end of March 2026 from $147.65 billion at the end of 2025, according to central bank data. The decline came as non-resident investors reduced their holdings of Philippine debt securities amid cautious sentiment and tighter financing conditions across emerging markets.
Despite slower economic growth, the country's debt burden improved. External debt as a share of gross domestic product eased to 30 percent from 30.3 percent in the previous quarter, indicating a healthier debt-to-economy ratio.
The BSP also reported stronger liquidity conditions. Short-term external debt based on remaining maturity declined to $25.50 billion, while the country's gross international reserves stood at $106.64 billion. The reserve level was equivalent to 4.18 times the country's short-term external debt, underscoring the Philippines' ability to meet near-term foreign obligations and maintain a reserve position that compares favorably with many emerging economies.
The debt service ratio, which measures the share of export earnings and other foreign exchange receipts used to pay external debt, remained manageable at 9.5 percent. However, it rose from 8.5 percent a year earlier due to higher principal repayments.
Compared with the same period last year, external debt increased slightly to $146.74 billion. The BSP attributed the increase primarily to new borrowings by the National Government and the private sector to support development projects, trade activities, and business expansion.
The central bank said the country's external debt profile remains resilient, with recent movements largely reflecting market adjustments and financing needs rather than signs of financial stress.
For businesses and investors, the latest figures signal continued stability in the country's external finances, supported by ample foreign exchange reserves and manageable debt levels.
