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THE PHILIPPINES\u2019 remarkable external debt surged to an unprecedented $148.87 billion as of end-June <\/span>amid the decline of the US dollar, according to the Bangko Sentral ng Pilipinas (BSP).<\/p>\n Data from the central bank indicated that the nation\u2019s external debt increased by 14.4% from $130.318 billion during the same timeframe last year.<\/p>\n \u201cThe growth in external debt was chiefly influenced by borrowings, which encompassed bond issues by the National Government totaling $5.83 billion and external funding accessed by local banks amounting to $3.44 billion,\u201d stated the BSP in a report. <\/span><\/p>\n Quarter-over-quarter, external debt edged up by 1.5% from the $146.74 billion recorded at the conclusion of the first quarter.<\/p>\n \u201cThe rise in external debt for Q2 (second quarter) 2025 was mainly attributed to valuation impacts resulting from the depreciation of the US dollar,\u201d the BSP noted.<\/p>\n External debt encompasses all borrowings by residents from non-residents.<\/p>\n The BSP remarked that the external debt level remained \u201csustainable,\u201d representing 31.2% of gross domestic product. This was an improvement from the 31.5% in the preceding quarter but higher than the 28.9% a year earlier.<\/span><\/p>\n The central bank pointed out that the weaker dollar raised the US dollar equivalent of borrowings denominated in other currencies by $1.49 billion.<\/p>\n During the April-to-June timeframe, the peso displayed robust performance against the dollar, trading within the P55 to P56 range, averaging P56.581 as of end-June. <\/span><\/p>\n \u201cThe net acquisition of Philippine debt securities amounting to $660.96 million also added to the rise (in external debt), while net repayments totaling $315.67 million partially moderated the growth in the nation’s external debt,\u201d the BSP elaborated.<\/p>\n Most of the nation\u2019s public sector liabilities, totaling $88.371 <\/span>billion, were sourced from the National Government, whereas the remainder originated from the BSP ($3.919 billion) and <\/span>government-owned banks ($1.81 billion).<\/span><\/p>\n Japan remained the Philippines\u2019 leading creditor with loans amounting to $15.599 billion, trailed by the United Kingdom with $6.358 billion and Singapore with $4.837 billion.<\/p>\n The borrowing composition was primarily made up of US dollar-denominated debt, followed by debt in Philippine pesos and Japanese yen.<\/p>\n As of the second quarter, the country\u2019s short-term external debt, based on the remaining maturity method (STRM), stood at $28.63 billion. STRM debt consists of loans with original maturities of one year or less alongside amortization on medium and long-term accounts maturing within the upcoming 12 months.<\/p>\n \u201cThis magnitude remains well-supported by the nation\u2019s gross international reserves (GIR) of $106 billion, providing a coverage ratio of 3.7 times for short-term liabilities,\u201d the BSP highlighted.<\/p>\n \u201cThe nation\u2019s GIR-to-STRM debt ratio is still on par with its emerging market counterparts.\u201d<\/p>\n Meanwhile, the BSP indicated that the decline in principal and interest payments by resident borrowers reduced the debt service ratio to 8.7% during the period, down from 9.8% a year prior. This ratio assesses a nation\u2019s ability to fulfill its obligations based on its foreign exchange earnings.<\/p>\n \u201cThis decline was due to reduced principal and interest payments by resident borrowers as of the second quarter of 2025,\u201d it added.<\/p>\n BSP data revealed that the public sector\u2019s external debt rose by 88.2% to $94.801 billion at end-June compared to $50.36 billion the previous year.<\/p>\n