THE country’s external debt service burden (DSB) dipped to $8.427 billion in the first eight months of the year, according to the Bangko Sentral ng Pilipinas (BSP).
Latest data from the BSP showed the DSB declined by 3.42 percent to $8.427 billion from January to August 2025 from $8.726 billion in the same period last year.
DSB is the total principal and interest payments the country has to pay after the debt has been rescheduled.
The bulk of the DSB during the eight-month period consisted of interest payments amounting to $5.215 billion. This marginally dropped by 0.43 percent year-on-year to $5.215 billion from $5.238 billion.
On the other hand, principal payments went down by 7.88 percent year-on-year to $3.212 billion from $3.487 billion.
From January to June 2025, the country’s debt service ratio, another indicator of capacity to service debt that compares the country’s loan payments with its income from exports and other inflows, improved to 2.9 percent from 3.2 percent a year earlier.
As a percentage of the country’s gross national income (GNI), this reached 2.5 percent, also slightly lower than the 2.9 percent in the same period in 2024.
In terms of other ratios, that of DSB to export shipments dropped to 19.8 percent in the eight-month period from 23.1 percent a year ago.
DSB ratio to exports of goods, and receipts from services and primary income stood at 8.1 percent in January to August 2025, lower than the 8.9 percent last year.
Despite the lower debt servicing, the country’s external debt rose by 14.35 percent year-on-year to $148.873 billion as of end-June, up from $130.182 billion.
The bulk of the external debt was accounted for by the public sector.
Public external debt jumped by 18.76 percent to $94.801 billion as of end-June 2025 from $79.825 billion in the same period a year ago.
Private external debt, meanwhile, grew 7.37 percent year-on-year to $54.072 billion from $50.357 billion.
BSP’s DSB data consists of principal and interest payments on fixed medium- and long-term (MLT) credits, including International Monetary Fund (IMF) credits, loans covered by the Paris Club.
It also includes interest payments on fixed and revolving short-term (ST) liabilities of banks and non-banks, but excludes prepayments on future years’ maturities of foreign loans and principal payments on fixed and revolving short-term liabilities of banks and non-banks.