THE country's debt service burden dropped by 7.6 percent to $7.69 billion as of the end of July from $8.33 billion a year earlier, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.

Principal payments fell by 28.14 percent to $3.11 billion from $4.33 billion, but interest payments slightly increased by 14.6 percent to $4.58 billion from $3.99 billion.

The debt service burden includes principal and interest payments on medium- to long-term credits like those from the International Monetary Fund, loans subject to Paris Club agreements and debt restructuring by commercial banks, as well as new money facilities.

It also includes interest payments on banks' and non-banks' fixed and revolving short-term liabilities, but not prepayments on future years' maturities of foreign loans and principal payments on fixed and revolving short-term liabilities.

A month earlier, the BSP reported that the country's outstanding external debt had reached $130.18 billion as of end-June, about 10.4-percent higher compared to the year-earlier figure of $117.92 billion.

Broken down, $79.83 billion of the amount was owed by the public sector, up 7.18 percent from the $74.48 billion recorded in the same period in 2023.

Private-sector debt amounted to $50.36 billion, 15.9 percent higher than the $43.44 billion reported at the end of June last year.

As a percentage of gross domestic product (GDP), the debt service burden declined to 3.1 percent as of the second quarter from 3.6 percent a year earlier.

External debt, meanwhile, was equivalent to 28.9 percent of GDP from 28.5 percent as of end-June.