Foreign debt payments rise slightly to $5.87 billion

MANILA, August 30 ------ The country’s external debt service burden inched up in the first five months as both principal and interest payments went up, data from the Bangko Sentral ng Pilipinas (BSP) showed.

From January to May, the Philippines paid $5.87 billion in external debt obligations, slightly above the $5.84 billion settled in the same period last year. Principal payments edged higher by 2.3 percent to $2.65 billion from $2.58 billion a year ago, while interest payments climbed by 4.4 percent to $3.22 billion from $3.08 billion, reflecting the impact of elevated global borrowing costs.

The debt service burden refers to the combined principal and interest payments made by the country to settle its foreign loans. These include amortizations on medium- to long-term borrowings as well as interest on short-term credit lines obtained from foreign creditors. For 2024, debt service payments surged by 16 percent to $17.16 billion from $14.85 billion in 2023.

The BSP said the debt service burden remained within manageable levels relative to the country’s external receipts. From January to May, the debt service burden accounted for 23 percent of export shipments and 9.3 percent of exports of goods, services and primary income.

Latest data from the BSP showed that the country’s foreign debt climbed by nearly seven percent to $146.74 billion as of end-March from the $137.64 billion posted in the fourth quarter of 2024. It was also 14 percent higher than the $128.76 billion in the same period last year. This represented 27.8 percent of gross national income and 31.5 percent of gross domestic product.

The BSP earlier noted that the Philippines’ external debt remains sustainable, with most obligations consisting of medium- and long-term borrowings owed largely to multilateral and bilateral creditors.

Source: philstar.com