Philippines' January external debt service drops by over 50%

Philippines' external debt service burden fell by more than 50% in January due to a significant drop in principal payments.

Debt servicing on external borrowings decreased to $799 million from $1.75 billion in the same period last year, with amortization payments dropping sharply to $79 million from $1.06 billion.

Interest payments increased slightly by 3.8% to $719 million in January compared to a year ago.

Rizal Commercial Banking Corp.'s Chief Economist Michael L. Ricafort attributed the decline in debt servicing to efforts to reduce foreign exchange risks and shift borrowing towards domestic sources.

The National Government plans to source at least 80% of its borrowing from domestic sources until 2027, reflecting a strategic move to minimize external financial risks.