Tackling External Debt Strategies for Students & Professionals to Overcome Burden

Tackling External Debt Strategies for Students & Professionals to Overcome Burden

As of end-November 2025, the Philippines' external debt service burden has surged by an alarming 14%. This trend not only poses significant challenges to government finances but also affects individuals who may be struggling with their own debt obligations. In this blog post, we will delve into strategies that students and professionals can employ to overcome the obstacles posed by external debt.

Understanding External Debt A Prerequisite for Success

Before exploring solutions, it is essential to grasp the concept of external debt. External debt refers to a country's debt obligations to foreign creditors, including governments, institutions, or individuals. This type of debt is typically secured through loans, bonds, or other financial instruments. In the Philippines' case, the increasing burden of external debt service payments warrants concern.

The Impact of External Debt on Students

For students, the rise in external debt service payments can have far-reaching consequences

Higher Education Costs With increased debt obligations comes higher education costs. As tuition fees and other expenses rise to keep pace with inflation, students may find themselves struggling to make ends meet.
Reduced Financial Freedom The burden of external debt can limit financial freedom, making it more challenging for students to pursue their passions or explore entrepreneurial ventures.

Strategies for Students to Overcome External Debt

To overcome these challenges, students can consider the following strategies

1. Create a Budget Start by creating a budget that accounts for all expenses, including debt payments. This will help you prioritize your spending and make adjustments as needed.
2. Consolidate Debt If possible, consolidate high-interest debt into lower-interest loans or credit cards to reduce overall debt obligations.
3. Seek Scholarships Apply for scholarships, grants, or other forms of financial aid to alleviate the burden of education costs.
4. Part-Time Jobs Take up part-time jobs or freelance work to supplement income and reduce reliance on debt.

The Impact of External Debt on Professionals

For professionals, the rise in external debt service payments can also have significant consequences

Increased Financial Pressure Higher debt obligations can lead to increased financial pressure, making it more challenging to make ends meet.
Limited Career Advancement The burden of debt may limit career advancement opportunities or force professionals to take on additional work hours to stay afloat.

Strategies for Professionals to Overcome External Debt

To overcome these challenges, professionals can consider the following strategies

1. Create an Emergency Fund Establish an emergency fund to cover unexpected expenses and reduce reliance on credit.
2. Consolidate Debt Similar to students, professionals can consolidate high-interest debt into lower-interest loans or credit cards to reduce overall debt obligations.
3. Increase Income Explore ways to increase income, such as taking on additional work hours, freelancing, or pursuing side hustles.
4. Seek Professional Help Consider seeking professional help from financial advisors or credit counselors to develop a personalized plan for tackling debt.

Conclusion

The rise in external debt service payments poses significant challenges for both students and professionals. However, by understanding the impact of this trend and implementing effective strategies, individuals can overcome these challenges and achieve their goals. Remember, it is essential to prioritize financial literacy, create a budget, and seek professional help when needed.

Tools and Resources

Budgeting Apps Consider using budgeting apps like Mint or You Need a Budget (YNAB) to track expenses and stay on top of debt.
Financial Education Platforms Explore online platforms like Coursera or edX that offer courses on personal finance, accounting, and financial literacy.
Credit Counseling Services Reach out to reputable credit counseling services like the National Foundation for Credit Counseling (NFCC) for personalized guidance.

By arming yourself with knowledge, resources, and strategies, you can overcome the challenges posed by external debt service payments and achieve financial stability. Remember, it's never too early or late to take control of your finances!

Edward Lance Arellano Lorilla

CEO / Co-Founder

Enjoy the little things in life. For one day, you may look back and realize they were the big things. Many of life's failures are people who did not realize how close they were to success when they gave up.