Manila: The Philippines' outstanding external debt remained manageable, declining to USD147.35 billion in the first quarter of the year from USD147.65 billion, the Bangko Sentral ng Pilipinas (BSP) said.

According to Philippines News Agency, "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 stated in a statement late Thursday. The BSP also noted that key debt indicators remained sound.

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. Liquidity conditions also strengthened, as the BSP reported that short-term external debt based on the remaining maturity concept (STRM) declined to USD25.50 billion, while gross international reserves stayed ample at USD106.64 billion.

"This is equivalent to 4.18 times STRM, indicating a strong capacity to meet near-term external commitments and a robust reserve adequacy position relative to emerging economy peers," said the BSP. Moreover, the debt service ratio remained moderate at 9.5 percent, although it was higher than the 8.5 percent recorded a year ago due to increased principal payments.

Year-on-year, external debt slightly increased from the end-March 2025 level of USD146.74 billion, mainly due to new borrowings by the national government and private sector, reflecting ongoing financing for development priorities and continued support for trade and business activity. "Overall, the external debt profile remains resilient, with developments primarily reflecting market-driven adjustments and financing requirements," the BSP concluded.