The Philippines is now deeper in debt to other countries, and the number is really big! As of March 2025, our country’s total external debt has reached $146.74 billion! That’s a huge amount of money we owe to other countries and big international banks.
But wait—what does that really mean?
💸 What Is External Debt?
External debt is like money we borrow from outside the country—from other governments, foreign banks, or world organizations. It’s money we don’t have right now, so we ask others to lend it, and we promise to pay it back later, with interest.
And here’s the twist: this debt grew by 6.6% compared to the last three months—and it’s 14% bigger than it was a year ago!
😮 How Big Is $146.74 Billion?
Think of it like this: If each Filipino paid ₱1,000 a day, it would still take generations to pay it all off! The Bangko Sentral ng Pilipinas (BSP)—the country’s top bank—says this amount equals 31.5% of everything the country earns in a year (that’s called GDP, or Gross Domestic Product).
Last quarter, it was only 29.8%, so yes—it’s getting bigger, but BSP says it’s still manageable… for now.
🚧 Why Did the Debt Grow So Much?
There are two big reasons:
-
The government borrowed more to pay for roads, bridges, and other infrastructure projects. These are the big things we all need, like highways and hospitals.
-
The government raised $5.06 billion from global bonds (that’s when other countries or institutions lend us money).
-
-
Philippine banks also borrowed money from abroad to keep their operations running and to make sure businesses can trade smoothly.
-
Local banks borrowed about $6.14 billion!
-
So in short: the government and banks both needed extra money, and they got it from outside the Philippines.
⏰ What About Short-Term Debts?
Some of our loans need to be paid back really soon—within 1 year. These are called short-term debts, and as of now, we owe $32.67 billion of them!
But don’t worry too much. The BSP says we have enough international savings, called gross international reserves (GIR), to pay these off if needed.
✅ Our GIR stands at $106.67 billion, which is more than 3 times what we owe in short-term debt. That’s like having ₱3 in your wallet for every ₱1 you owe next week.
📉 Good News: We’re Paying Less Interest
Here’s a bit of good news—even though we owe a lot, the amount we’re paying back right now is actually a little lower than before.
The Debt Service Ratio (that’s how much we pay for loans compared to how much we earn from exports) went down from 9% to 8.4%.
That means:
-
We paid less in interest and loan fees this year.
-
Some Filipino businesses or groups who borrowed money had fewer dues in early 2025.
📊 So… Should We Be Worried?
Well… it’s like this:
-
Yes, our debt is growing fast.
-
But we still have enough savings (GIR) to cover it.
-
We’re still able to pay back loans on time, for now.
-
But if borrowing keeps going up and we don’t earn more money as a country, we could face bigger problems in the future.
