The Philippines’ external debt climbed to a new record high of $149.1 billion as of end-September 2025, marking a quarter-on-quarter increase of 0.1 percent, according to the latest data released by the Bangko Sentral ng Pilipinas (BSP).

The marginal rise from the previous quarter’s level of $148.9 billion was driven mainly by the net acquisition of Philippine debt securities by non-resident investors amounting to $1.5 billion, reflecting heightened foreign participation in the domestic capital market, the BSP said in a statement on Friday night, Dec. 12.

This increase was partly offset by net repayments of $764.6 million and valuation adjustments of $442.5 million due to the appreciation of the United States (US) dollar against the Philippine peso during the period.

Despite the uptick, the BSP said the country’s external debt position remains sustainable, with the foreign debt-to-gross domestic product (GDP) ratio easing to 30.9 percent from 31.2 percent in the previous quarter.

The central bank added that key indicators continue to show the country’s capacity to service its external obligations, supported by prudent macroeconomic policies and solid economic fundamentals.

On a year-on-year basis, external debt rose by 6.8 percent, largely due to new borrowings, including $3.3 billion in global bond issuances by the national government (NG) and $1.6 billion in external financing tapped by local banks, the BSP said.

The BSP noted that the country’s gross international reserves (GIR), or US dollar stock, of $109.1 billion remained more than sufficient to cover short-term external debt based on the remaining maturity concept (STRM) of $27.2 billion, providing a 4.01-times cover—a level better than most emerging market (EM) peers. STRM debt covers short-term borrowings and portions of medium- and long-term debt that are scheduled to mature within the next year.

“Meanwhile, 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 8.5 percent from 11.5 percent a year earlier. This resulted from lower principal and interest payments by resident borrowers for the period,” the BSP added. The debt service ratio measures how much of the country’s foreign exchange (forex) earnings from exports and income is used to pay principal and interest on external debt, with a lower ratio indicating stronger capacity to meet obligations while supporting growth and buffering against external shocks.

In the World Bank Group’s (WBG) International Debt Report (IDR) 2025 published last Dec. 3, the Washington-based multilateral lender included the Philippines among low- and middle-income countries (LMICs) that have not only attracted local investors but have also become “attractive to international investors.”

Due to the NG’s increased borrowings from both foreign and local lenders, compounded by the recent peso slump, the Philippines’ outstanding public debt reached ₱17.562 trillion as of end-October, nearly exceeding the historic high of ₱17.563 trillion recorded at end-July.