The central bank said Tuesday that the country’s external exposure has improved in the second quarter this year, it’s down to P670.5 billion compared to P1.8 trillion same period in 2019.

The Bangko Sentral ng Pilipinas (BSP) said in a statement that the net external liability position “substantially declined” by 62.3 percent as external financial assets were up while liabilities fell.

 “This improvement in the country’s net debtor position against the rest of the world (ROW) is attributed to the 7.4 percent increase in the domestic economy’s external financial assets to P10.4 trillion along with the 3.4 percent contraction in its external financial liabilities to P11.1 trillion,” said the BSP.

In its Philippine Balance Sheet Approach (BSA) report for the second quarter, which the BSP explained as the country’s sectoral accounts on a from whom-to-whom (WTW) basis, the net financial asset position increased with the household (HH) sector reporting P9 trillion, up 19.7 percent year-on-year from P7.5 trillion.

Financial assets were deposits in other depository corporations (ODCs) as well as equity and investment fund shares and insurance, pension, and standardized guarantee schemes with the other financial corporations (OFCs), said the BSP.

ODCs reported P1.7 trillion during the period, up 38.3 percent year-on-year, and these are mostly Central Bank (CB) currency and deposits. OFCs and CB’s net financial asset position declined by 56.7 percent and 6.74 percent to P292.3 billion and P598.6 billion.

The BSP said the non-financial corporations (NFCs) and the general government (GG) sectors remained net debtors at P7.2 trillion and P5.1 trillion, respectively. NFC’s net liability position was down 10.1 percent year-on-year while GG’s were up by 31.7 percent because of higher issuance of government securities and loans to finance the fight against COVID-19 pandemic.

The BSA report also included a report on the country’s gross financial asset position and gross liability position.

In the second quarter, the BSP said the domestic economy’s total financial assets went up by 11.4 percent year-on-year to P61.3 trillion and these are currency and deposits, loans, and debt securities.

The ODCs accounted for P19.9 trillion of financial claims which were primarily loans, extended mostly to NFCs at P8.7 trillion and HHs at P13.9 trillion, and deposits in BSP facilities. OFCs’ financial assets of P8.1 trillion are predominantly invested in equity and investment fund shares. CB’s financial claims stood at P6.2 trillion while GG was at P4.5 trillion.

The BSA also noted that the domestic economy’s financial liabilities widened by 9.1 percent to P62 trillion with ODCs’ liabilities – about 30 percent of the domestic economy’s total liabilities – at P18.2 trillion.

The NFCs’ liabilities was at P15.9 trillion while GG’s financial obligations increased to P9.6 trillion and OFCs’ at P7.8 trillion. The CB’s liabilities also grew to P5.6 trillion in the second quarter while HHs had P5 trillion.