Net external liability position reaches $59.3 billion as of March
Preliminary data on the net international investment position (IIP) indicated a net liability position of $59.3 billion as of end-March, higher by 15.5 percent than the $51.3 billion recorded in end-December 2023.
This development was driven by the 3.8 percent expansion in external financial liabilities, outpacing the 1.3 percent growth in external financial assets.
As of end-March, total outstanding external financial liabilities reached $303.8 billion, while total outstanding external financial assets amounted to $244.5 billion.
Total stock of external financial liabilities as of end-March rose, as all components registered an increase, except for financial derivatives.
Net foreign portfolio investment (FPI) increased by 5.3 percent to $90.3 billion from $85.8 billion, which was due to transaction inflows and positive price revaluations.
Net foreign direct investment (FDI) rose by 3.3 percent to $126.6 billion from $122.6 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.
Further, other investments, in the form of loans, rose by 3 percent to $74.7 billion from $72.5 billion, contributing to the rise in the total external financial liabilities of the country.
Total stock of external financial assets rose due to the increase in the residents’ net portfolio investments, particularly in debt securities to $33.5 billion (by 7 percent from $31.3 billion) and direct investments in equity capital to $29.8 billion (by 2.1 percent from $29.2 billion) as of end-March.
On a year-on-year basis, net external liability position expanded by 25.8 percent from $47.1 billion in end-March 2023.
This was on account of the 7.7 percent growth in total external financial liabilities from $282.1 billion, which more than offset the 4 percent growth in total external financial assets from $235 billion.
Total external financial liabilities grew by 7.7 percent year-on-year stemming from the collective growth in net FDI (by 8.2 percent to $126.6 billion), other investments (by 12.4 percent to $86.6 billion), and net FPI (by 2.9 percent to $90.3 billion).
In particular, non-residents’ net investment in debt instruments as well as equity capital rose by 11.8 percent (to $64.3 billion from $57.6 billion) and 4.8 percent (to $62.3 billion from $59.4 billion), respectively.
Residents’ net outstanding loans from nonresident creditors rose by 15.7 percent (to $74.7 billion from $64.5 billion). Further, non-residents’ net outstanding investments in portfolio debt securities increased by 4.5 percent (to $51.1 billion from $48.9 billion) as of end-March.
Meanwhile, the 4 percent annual growth in total external financial assets was mainly on account of the 5.2 percent increase in residents’ net direct investments abroad (to $72.4 billion from $68.8 billion).
Reserve assets likewise rose by 2.5 percent (to $104.1 billion from $101.5 billion) reflecting mainly the National Government’s (NG) net foreign currency deposits with the BSP, BSP’s net income from its investments abroad, BSP’s net foreign exchange operations, and upward adjustments in the BSP’s gold holdings and foreign currency-denominated reserve assets, excluding gold.
In addition, residents’ net investments in portfolio investments grew by 6.8 percent (to $39.3 billion from $36.8 billion).
The BSP continued to hold the largest share of the country’s total external financial assets at 44.4 percent, valued at $108.6 billion as of end-March.
This level was 0.1 percent higher than the $108.5 billion asset holdings registered in end-December 2023. The Other Sectors accounted for 41.2 percent of the country’s outstanding external financial assets at $100.9 billion.
The Banks accounted for the remaining 14.3 percent of the country’s total external financial assets, amounting to $35.1 billion.
The Other Sectors contributed the largest share to the country’s total external financial liabilities at 60.3 percent or equivalent to $183.2 billion as of end-March.
This level was 3.2 percent higher than the end-December 2023 level of $177.5 billion. The NG, likewise, recorded a 2.7 percent growth in its outstanding external financial liabilities to reach $77.4 billion, which represents 25.5 percent of the Philippines’ total external financial liabilities.
The Banks’ share accounted for 13 percent of the country’s total external financial liabilities at $39.4 billion as of end-March.
Meanwhile, the BSP held a marginal portion or 1.3 percent of the country’s total external financial liabilities at US$3.8 billion, which were mostly in the form of Special Drawing Rights (SDRs). Bangko Sentral ng Pilipinas
