The Bangko Sentral ng Pilipinas (BSP) said the international investment position’s (IIP) net external liability is down by 64.9 percent to $4.8 billion as of end-September from end-June’s $13.6 billion.
The BSP in a statement said the “steep decline” was due to the 6.3 percent increase to $222.9 billion of the country’s total financial assets or residents’ outstanding claims on non-residents, and offsetting the two percent increase in the total external financial liabilities or non-residents’ outstanding claims on Philippine residents to $227.7 billion.
The BSP’s accumulation of reserves of $100.4 billion (end-September period) is the reason for the higher total external financial assets as well as the 13.5 percent increase in residents’ portfolio investments in debt securities issued by non-residents.
The BSP said the moderate growth in total external financial liabilities was due to the 4.8 percent increase in other investments to $57.9 billion, noting that “these were driven largely by the National Government’s (NG) foreign borrowings (in the form of loan availments) as budgetary support to finance its COVID-19 pandemic response programs as well as various infrastructure projects.”
As of end-September, foreign direct investments and foreign portfolio investments rose to $95.2 billion and $73.9 billion, respectively.
“Positive revaluation adjustments on the NG’s foreign borrowings in the form of loans and debt securities due to the weakening of the US dollar against other currencies during the quarter likewise contributed to the increase in the country’s external liabilities,” said the BSP.
On the other hand, on a year-on-year basis, the country’s net external liability position as of end-September declined by 86.2 percent from $34.7 billion in 2019, said the BSP.
The central bank also reported that the BSP still holds the biggest share of total external financial assets at 45.9 percent or $102.3 billion during the period. The “other sectors” have 37.3 percent or $83.2 billion while the remaining 16.8 percent were held by banks amounting to $37.5 billion. The IIP is a complementary data to the balance of payments statistics.