The country’s net external liability position amounted to $59.261 billion as of end-March this year, up by 25.8 percent from same time last year of $47.121 billion due to the growth in external financial liabilities.
The external liability position is a Bangko Sentral ng Pilipinas (BSP) report based on the international investment position (IIP). The IIP as defined by the BSP is a statistical statement indicating the value of financial assets of residents of an economy that are claims on non-residents at some point in time. The net IIP position is the difference between the assets and liabilities and it is either a net claim on or a net liability to the rest of the world.
Based on BSP data, on a quarterly basis the net liability position increased by 15.5 percent from $51.317 billion as of end-December 2023. This was due to the 3.8 percent expansion in the country’s external financial liabilities, which outpaced the 1.3 percent growth in external financial assets.
As of end-March this year, the total outstanding external financial liabilities totaled $303.8 billion while total outstanding external financial assets reached $244.5 billion.
The country’s total stock of external financial liabilities as of end-March 2024 rose, as all components registered an increase, except for financial derivatives, said the BSP.
The data showed that during the period, net foreign portfolio investment (FPI) increased by 5.3 percent to $90.3 billion from $85.8 billion in the previous quarter due to transaction inflows and positive price revaluations.
In addition, net foreign direct investment (FDI) also increased by 3.3 percent to $126.6 billion from $122.6 billion, thus also increasing total external financial liabilities. Other investments in the form of loans also went up by three percent to $74.7 billion from $72.5 billion.
“The expansion in net FDI and FPI reflects investor confidence in the Philippine economy on the back of the country’s growth and improved domestic inflation dynamics,” said the BSP.
On a year-on-year basis, with net IIP position expanding by 25.8 percent, the BSP attributed this to the 7.7 percent growth in total external financial liabilities to $303.768 billion from $282.132 billion. This more than offset the four percent growth in total external financial assets from $235.011 billion to $244.507 billion.
In the tally of external financial assets, the BSP continued to account for the largest share of the country’s total external financial assets at 44.4 percent worth $108.6 billion as of end-March.
The “other sectors” accounted for 41.2 percent of the country’s outstanding external financial assets at $100.9 billion while banks accounted for the remaining 14.3 percent of total external financial assets valued at $35.1 billion.
The other sectors include other financial corporations such as private and public insurance corporations, holding companies, government financial institutions, investment companies, other financial intermediaries except insurance, trust institutions/corporations, financing companies, securities dealers/brokers, lending investor, investment houses, pawnshops, credit card companies, offshore banking units. It also includes non-financial corporations which are public and private corporations and quasi-corporations as well as households and non-profit institutions serving households.
Meanwhile, the other sectors contributed the largest share to the country’s total external financial liabilities at 60.3 percent or $183.2 billion while the National Government posted a 2.7 percent growth to $77.4 billion in its outstanding external financial liabilities which represents 25.5 percent of the total external financial liabilities.
The banks accounted for 13 percent or $39.4 billion of the country’s total external financial liabilities as of end-March while the BSP’s share was just 1.3 percent or $3.8 billion.