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Keisha Ta-Asan - The Philippine Star
February 23, 2025 | 12:00am
During the 11-month period, principal payments rose by 12.9 percent to $8.39 billion from $7.43 billion a year ago. Likewise, interest payments went up by 15.2 percent to $7.35 billion in the first 11 months from $6.38 billion a year ago.
STAR / Edd Gumban, file
MANILA, Philippines — The country’s external debt service burden went up by 14 percent to $15.74 billion from January to November last year compared to $13.81 billion in the same period in 2023 amid higher principal and interest payments, the Bangko Sentral ng Pilipinas (BSP) said.
During the 11-month period, principal payments rose by 12.9 percent to $8.39 billion from $7.43 billion a year ago. Likewise, interest payments went up by 15.2 percent to $7.35 billion in the first 11 months from $6.38 billion a year ago.
The external debt service burden refers to the amount of money a country needs to pay back for the loans it has taken from other countries or organizations abroad. It represents principal and interest payments after rescheduling.
It consists of principal and interest payments on fixed medium and long-term credits, including International Monetary Fund (IMF) credits, loans covered by the Paris Club and commercial banks’ rescheduling and new money facilities.
It also includes interest payments on fixed and revolving short-term liabilities of banks and non-banks, excluding prepayments on future years’ maturities of foreign loans and principal payments on fixed and revolving short-term liabilities of banks and non-banks.
Latest data from the central bank showed that the country’s foreign debt climbed by 17.5 percent to an all-time high of $139.64 billion as of end-September 2024 from a year-ago level of $118.83 billion.
The rise in the debt level as of the third quarter last year was driven primarily by higher borrowings of the national government and the private sector.
Public sector external debt grew by 8.8 percent to $86.88 billion in the third quarter from $79.83 billion in the second quarter, with its share of total debt at 62.2 percent.
Meanwhile, the private sector’s foreign borrowings rose by 4.8 percent to $52.76 billion in the third quarter from $50.36 billion a quarter prior.
The national government borrows heavily from foreign and domestic creditors to finance the country’s budget deficit as it spends more than what it actually earns.
