Net external liability position widens, quarter-on-quarter: BSP
The country’s net external liability position widened by four percent quarter-on-quarter to P2.6 trillion in the third quarter of 2023 from P2.5 trillion in the second quarter in 2023 due to the higher net external liability position of the non-financial corporations.
By sector, the general government’s net financial liability position expanded by 4.2 percent quarter-on-quarter to P9 trillion from P8.6 trillion. This resulted from the decline in the national government’s deposits with the central bank, which the national government partly used for the repayment of its domestic and external obligations.
On an annual basis, the general government’s net financial liability position increased on the back of lower financial assets and higher debt. Its lower financial assets resulted mainly from the decline in the sector’s deposits in the central bank. In addition, higher debt emanated from higher net issuances of government securities and net availment of foreign loans.
The non-financial corporations’ net financial liability position slightly declined by 0.5 percent quarter-on-quarter to P8.8 trillion from P8.9 trillion. This developed as the non-financial corporations’ deposits in the other depository corporations increased.
On a year-on-year basis, the non-financial corporations’ net liability position widened, which stemmed from the increase in the sector’s loans from the rest of the world. Further, equity and investment fund shares issued by the non-financial corporations to the rest of the world and the other financial corporations increased.
The households’ net financial asset position increased by 3.2 percent quarter-on-quarter to P12.8 trillion from P12.4 trillion. In the third quarter of 2023, the households’ net claims on the other depository corporations grew driven by the increase in the households’ bank deposits. Similarly, the households’ holdings of other financial corporations-issued equity and investment fund shares rose.
Year-on-year, the households’ net creditor position increased due primarily to the increase in the sector’s holdings of other financial corporations-issued equity and investment fund shares. Likewise, the sector’s net claims on the other depository corporations grew as the households’ deposits expanded.
The other depository corporations’ net financial asset position declined by 7.8 percent quarter-on-quarter to P1.7 trillion from P1.8 trillion as the households and non-financial corporations’ deposits with the other depository corporations increased.
However, this was tempered by the other depository corporations’ a) higher holdings of Bangko Sentral ng Pilipinas-issued debt securities and b) higher placements in reverse repurchase agreements with the Bangko Sentral ng Pilipinas. Year-on-year, the sector’s net financial asset position declined, which stemmed mainly from the higher deposits from the households, the other financial corporations, and the non-financial corporations. Further, the sector’s holdings of debt securities issued by non-residents declined.
The central bank’s net financial asset position increased by 3.5 percent quarter-on-quarter to P795.3 billion from P768.2 billion. This resulted mainly from lower deposit liabilities to the general government. Further, the sector’s net claims on the rest of the world grew as the Philippine peso equivalent of the central bank’s gross international reserves rose with the depreciation of the Philippine peso against the US dollar.
Lastly, the sector’s net obligations to the households declined due to the lower currency holdings of the household sector. On a year-on-year perspective, the central bank’s net financial asset position declined driven largely by the other depository corporations’ higher holdings of Bangko Sentral ng Pilipinas-issued debt securities.
Similarly, the other depository corporations’ placements in reverse repurchase agreements and deposits with the central bank increased. BSP
