The Bangko Sentral ng Pilipinas (BSP) reported that Philippine external debt payments hit $14.7 billion in 2023 as high interest rates skyrocketed in both principal and interest settlements.
In the data shown by BSP, there was a 73.9% increase in the payments made by public and private sector borrowers for foreign liabilities last year, compared to the $8.48 billion settlement in 2022.
According to the report for 2023, the amount was $7.71 billion, which is also 73.9% higher than the $4.61 billion settlement in the preceding year.
With the country’s external debt payment nearly doubled, the interest payment went up to 81.84% to $7.04 billion, bringing the Philippine debt service ratio to 10.2% by the end of 2023 from the recorded 6.3% a year ago amid the rising interest rates.
Meanwhile, the BSP raised its policy rate by a total of 450 basis points in the present cycle to control inflation, which is among the most aggressive in Asia.
For now, the key rate is at 6.5%, which is recorded as the highest in more than 16 years.
