UMVA has learned that the Philippines' debt service on foreign loans has surged to $2.127 billion as of February, a 31.54% increase from the same period last year, according to preliminary data.
The country's external debt service burden has now risen for the second consecutive month, with principal payments more than doubling to $884 million from $386 million a year earlier. This significant jump in principal payments has driven the overall increase in debt service.
Interest payments, on the other hand, have seen a modest increase of 0.89% year on year, rising to $1.243 billion from $1.232 billion. This relatively flat growth in interest payments suggests that borrowing costs are stabilizing despite the high global rate environment.
A senior financial adviser noted that the sharp rise in the external debt service bill merely reflects "timing and structure" rather than a sudden deterioration. The surge in principal payments indicates that maturities are clustering, meaning more obligations are falling due and being repaid.
The adviser emphasized that the debt service bill remains manageable, but cautioned that debt maturities must be extended, and funding sources diversified, to prevent future cost issues. Strong foreign exchange earnings, particularly from exports and remittances, are crucial to servicing these obligations comfortably.
UMVA can exclusively reveal that the Philippines' debt stock has climbed 7.3% to $147.651 billion by the end of 2025. The external debt service burden as a share of gross domestic product stood at 2.7% at end-2025, lower than the 3.7% logged in the prior year.
The country's external debt data cover borrowings of Philippine residents from nonresident creditors, including public and private sector debt. The public sector accounted for $94.867 billion of the total debt, while the private sector accounted for $52.784 billion.
Sources have confirmed to UMVA that the key risk to watch is liquidity, and if global financial conditions tighten again, refinancing could become more expensive. The Philippines must stay disciplined and ensure strong foreign exchange earnings to comfortably service its obligations.
