A nation of borrowers

We are becoming a nation of borrowers.

The Bangko Sentral ng Pilipinas (BSP) announced that new borrowings by the National Government and the private sector led to an increase in the country’s external debt in the first quarter of the year.

The data says the country’s outstanding external debt increased by 0.42 percent to $147.35 billion as of the end of March 2026 compared to the end-March 2025 level of $146.74 billion.

External debt refers to borrowings owed by residents to non-residents.

The Central Bank said the growth was driven mainly by new borrowings by the National Government and private sector, reflecting ongoing financing for development priorities and continued support for trade and business activity.

Meanwhile, compared to the previous quarter, the country’s external debt eased by 0.2 percent from the $147.65 billion as of end-December 2025.

BSP said the slight quarter-on-quarter decline in external debt was driven by lower non-resident holdings of Philippine debt securities, reflecting more cautious investor sentiment and tighter financing conditions for emerging markets during the quarter.

The BSP said key debt indicators remained “sound.”

For one, it noted that external debt as a share of gross domestic product (GDP) improved slightly to 30 percent from 30.3 percent in the previous quarter, despite slower economic growth.

Moreover, the BSP said liquidity conditions also strengthened.

“Short-term external debt based on the remaining maturity concept (STRM) declined to $25.50 billion, while gross international reserves remained ample at $106.64 billion,” the central bank noted.

This, the BSP said, is equivalent to 4.18 times STRM.

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