Foreign debt service bill falls to $6.72 billion

THE Philippines' external debt service burden dropped to $6.72 billion in the first half of the year as less foreign loans were due for repayment, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.

- By Katherine K. Chan

Debt service on external borrowings went down by 6.2% to $6.72 billion as of June from $7.164 billion in the same period in 2024.

Broken down, principal payments declined by 13.1% year on year to $2.77 billion in the January-to-June period from $3.189 billion.

Meanwhile, interest payments dipped by 0.7% in the first six months to $3.949 billion as of end-June from $3.976 billion last year.

“The decline in the Philippines’ external debt service burden in the first half mainly reflects lower principal repayments as fewer foreign obligations matured, alongside liability management efforts and a borrowing mix favoring domestic sources," Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion said in a Viber message.

Mr. Asuncion also noted the decline in debt servicing shows the country's foreign debts are manageable, giving the government more fiscal space and easing the strain on its dollar reserves.