The country’s external debt service burden inched up to $5.87 billion as of end-May, a slight 0.5 percent increase from $5.84 billion a year earlier, according to preliminary data from the Bangko Sentral ng Pilipinas (BSP).
Figures showed that principal payments grew by 2.7 percent to $2.65 billion, while interest payments dipped by 1.2 percent to $3.22 billion. The debt service burden reflects both principal and interest obligations on medium- to long-term foreign loans, including those from international institutions and commercial banks, as well as interest on short-term liabilities.
The BSP reported that the country’s outstanding external debt climbed to $146.74 billion as of March, significantly higher than $126.69 billion recorded in the previous quarter. Despite the increase, the central bank emphasized that the debt-to-GDP ratio remained at a “prudent level” of 31.5 percent, up slightly from 29 percent.
Breaking down the figures, public sector debt rose to $91.54 billion from $78.9 billion, while private sector borrowings expanded to $55.2 billion from $49.79 billion.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the modest rise in debt service was linked to the government’s wider budget deficits, which prompted more borrowings. “For the coming months, the share of foreign borrowings in the total borrowing mix has been reduced in view of forex risks entailed, with a greater share of domestic borrowings,” he explained.
He added that the government’s future financing activities will continue to depend heavily on how budget deficits evolve.
