The Philippines’ external debt climbed to a record $147.65 billion at the end of 2025, driven by an uptick in foreign borrowing from both the public and private sectors.

Data from the Bangko Sentral ng Pilipinas (BSP) showed this figure represents a year-on-year increase of 7.3 percent from $137.63 billion in 2024.

This was driven by $3.29 billion in fresh national government (NG) bond issuances and $3.72 billion in new foreign borrowings tapped by private banks.

Notably, the 2025 level of external debt is the highest on record since 2016. It also nearly doubled in value after a decade.

Despite this debt level, the share of external debt to the country’s economic output—measured by gross domestic product (GDP)—improved to 30.3 percent as of end-December 2025. This level eased from the higher 30.9 percent in the third quarter and is significantly lower than the 31.5 percent peak seen in March 2025.

In 2025, the public sector remained the primary borrower, accounting for $94.87 billion, nearly two-thirds of the total debt in 2025. Meanwhile, the private sector held the remaining $52.78 billion.

Bondholders and noteholders accounted for the largest share of the country’s foreign loans, at $48.95 billion.

They were followed by multilateral lenders, such as the World Bank’s International Bank for Reconstruction and Development (IBRD) and the Asian Development Bank (ADB), accounting for $41.39 billion.

Among the Philippines’ partner countries, Japan is the largest bilateral creditor at $16.58 billion, significantly higher than China at $4.90 billion and the United States (US) at $2.33 billion.

Compared to the previous quarter, the country’s external debt declined by $1.44 billion in the fourth quarter from the $149.09 billion record reached as of end-September 2025.

This quarterly reduction was primarily attributable to non-residents selling $2.28 billion of Philippine debt securities and a $659.38 million reduction from lower US dollar valuations of borrowings denominated in other currencies.

These developments offset the effect of $1.44 billion in net borrowings during the final quarter.

“Debt manageability also slightly improved amid weaker-than-expected economic growth and cautious market sentiment,” the BSP said in its report released on Friday, March 13.

Recall that the local economy slumped to a growth of 4.4 percent, significantly falling short of the 5.5 percent minimum target. This surprising sharpness of the slowdown was blamed on the flood control corruption controversy, which erupted in the second half of 2025.

As of end-December 2025, the country’s short-term foreign debt (measured by remaining maturity or STRM) stood at $26.80 billion, modestly inching up from $26.36 billion in the previous quarter.

STRM debt includes loans with original maturities of one year or less plus payments due within the next 12 months on medium- and long-term accounts.

This amount is amply backed by the country’s all-time high gross international reserves (GIR) of $110.83 billion. Such a size is deemed sufficient to cover short-term debt 4.1 times over, indicating a strong reserve adequacy position.

Meanwhile, the debt service ratio—which measures loan payments against earnings from exports and other inflows—improved to 8.3 percent from 11.5 percent in 2024.

This was a result of lower principal and interest payments by resident borrowers during the period, the BSP said.