The Philippines’ external debt position remained stable in the third quarter of 2025, reflecting sustained investor confidence and prudent macroeconomic management despite a volatile global environment.
Outstanding external debt stood at $149.09 billion as of end-September 2025, posting only a marginal 0.1 percent increase from the previous quarter. This slight uptick was largely driven by stronger participation of non-resident investors in the domestic capital markets, with net acquisitions of Philippine debt securities reaching $1.47 billion.
The increase was partly offset by net repayments of $764.56 million and favorable valuation adjustments amounting to $442.50 million following the appreciation of the US dollar during the quarter.
Importantly, the country’s external debt burden relative to economic output continued to improve. External debt declined to 30.9 percent of gross domestic product, down from 31.2 percent in the previous quarter, underscoring the economy’s expanding capacity to support its obligations.
Key indicators point to a well-managed and sustainable external debt profile. As of end-September 2025, short-term external debt based on remaining maturity stood at $27.16 billion. This level was more than adequately covered by the country’s gross international reserves of $109.06 billion, translating to a robust 4.01 times cover for short-term obligations.
This ratio, which stood at 3.85 as of end-June 2025, compares favorably with those of many emerging market peers and highlights the strength of the country’s external buffers.
Debt servicing capacity also showed marked improvement. The debt service ratio, which measures loan payments relative to export earnings and other foreign currency inflows, eased to 8.5 percent from 11.5 percent a year earlier. The decline reflects lower principal and interest payments by resident borrowers, providing additional fiscal and external sector breathing space.
On an annual basis, external debt rose by 6.8 percent, driven mainly by fresh financing to support development and financial sector needs. These included National Government bond issuances totaling $3.33 billion and $1.58 billion in external funding raised by local banks.
Overall, the data indicate that the country continues to tap external financing strategically while maintaining solid fundamentals, ample reserves, and a strong capacity to meet its external obligations.