Philippines external debt outpaces peer-country growth in World Bank review

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Philippines external debt growth

Highlights

Philippines' external debt grows 7.6% to $147.17 billion in 2025, outpacing the 5.5% global peer-country increase, according to the World Bank.
Public and publicly guaranteed external debt totals $93.71 billion, with $41.69 billion owed to private creditors, $40.67 billion to multilaterals, and $11.36 billion to bilateral creditors.
Despite rising debt, the Philippines' external debt-service ratios fall, with payments equal to 11% of exports and 3% of GNI, easing over 23% from 2024.

Debt growth and creditor mix in 2025

As reported by BusinessWorld Online, citing the World Bank in its International Debt Report 2026, the Philippines' external debt rises 7.6% to $147.17 billion in 2025, above the 5.5% increase recorded across low- and middle-income countries. The report also shows the country's external debt stock is 84.7% higher than the $79.7 billion posted in 2015.

Public and publicly guaranteed external debt accounts for 63.67% of the total, or $93.71 billion, while private non-guaranteed debt stands at $33.23 billion and short-term debt reaches $20.23 billion. Within the public and publicly guaranteed portion, $41.69 billion is owed to private creditors, $40.67 billion to multilateral lenders and $11.36 billion to bilateral creditors.

The Asian Development Bank accounts for $17.48 billion of the multilateral debt, while the World Bank's International Bank for Reconstruction and Development holds $16.14 billion. Japan remains the Philippines' largest bilateral creditor with $8.83 billion in outstanding debt, followed by France with $1.29 billion.

Debt burden indicators and broader developing-market trend

Despite the larger debt stock, the Philippines' external debt relative to gross national income remains broadly stable at 26% in 2025. The country's external debt-service ratios also ease, with principal and interest payments equivalent to 11% of exports and 3% of GNI, down 23.8% and 23.7%, respectively, from 2024.

The World Bank also says Philippine public and publicly guaranteed external bond issuances through mid-August 2026 have already exceeded the full-year 2025 total, pointing to continued access to offshore funding.

Across low- and middle-income countries, external debt reaches a record $9.4 trillion in 2025, with growth of 5.5%, the fastest since 2021, after a rebound in bond issuance, a weaker dollar and renewed investor appetite. The bank says private lenders return, bond markets reopen and governments find new financing channels, but total external debt-service payments still rise 1.9% to $1.4 trillion, increasing pressure on public resources needed for infrastructure, jobs, education and health.

At the same time, net transfers on long-term debt turn positive, with new financing exceeding principal and interest payments by $45.4 billion, reversing a net outflow of $118.4 billion in 2024.

Our earlier coverage of the Philippines’ sovereign bond market reforms outlined plans to adopt a new pricing convention for peso-denominated government bonds and pursue inclusion in J.P. Morgan’s Government Bond Index-Emerging Markets. We noted that while these steps can broaden the investor base and improve liquidity, the payoff in terms of lower borrowing costs and real-economy investment still depends on global rates, fiscal credibility, and deeper domestic capital-market development.

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