THE PHILIPPINES’ net external liability position widened as of end-September, data from the Bangko Sentral ng Pilipinas (BSP) showed.
The country’s international investment position (IIP) stood at a net external liability of $74.2 billion at the end of September, 33.3% bigger than the $55.7-billion net liability at the end of June.
Year on year, the net external liability position was also 60.1% wider than $46.4 billion in the same period a year ago.
The IIP is an indicator of the value and composition of a country’s financial assets and liabilities. It gauges an economy’s external exposure.
“This development was driven by the 10.1% expansion in the country’s external financial liabilities, which outpaced the 4.8% growth in external financial assets,” the BSP said in a statement.
Total outstanding external financial assets rose by 4.8% to $254.7 billion at the end of the third quarter from $243.1 billion in the previous quarter. Year on year, it jumped by 9.5%.
“The country’s total stock of external financial assets expanded mainly on account of the country’s accumulation of reserve assets, which reached $112.7 billion as of end-September 2024 (or an increase of 7.1% from $105.2 billion),” the BSP said.
The expansion in external financial assets was also driven by the growth in the residents’ net portfolio investments in foreign debt securities, which grew by 7.2% quarter on quarter to $33.7 billion from $31.4 billion.
It also cited growth in net direct investments in debt instruments (3.3%) and equity capital of their foreign affiliates (1.7%).
Almost half or 46.2% of the external financial assets are reserve assets held by the BSP, equivalent to $117.8 billion. Other sectors accounted for 39.7% of the total or $101.1 billion during the same period while banks kept $35.8 billion (14.1%).
Meanwhile, total external financial liabilities likewise climbed by 10.1% to $328.9 billion at end-September from $298.8 billion at end-June. It also jumped by 17.9% year on year.
“The country’s total stock of external financial liabilities as of end-September 2024 rose, as most components registered an increase, led by foreign portfolio investment.”
Net foreign portfolio investments grew by 18.7% to $104.4 billion during the period.
The BSP said this was driven by the “notable increase in nonresidents’ outstanding investments in debt papers, particularly government securities and equity securities of local corporations.”
“The high demand for the newly issued government securities at competitive pricing reflected continued investor confidence in the country’s economic resilience, despite global challenges.”
“Meanwhile, nonresidents’ outstanding investments in equity securities rose due to upward valuation and additional inflows, mirroring the rise in the Philippine Stock Exchange index,” it added.
Other sectors accounted for 58.7% or $193 billion of the country’s total external financial liabilities at the end of September.
The rest were held by the National Government and banks, with financial liabilities worth $88.6 billion and $43.4 billion, respectively.
The BSP held 1.2% of all external financial liabilities at $3.9 billion, which were mostly in the form of special drawing rights. — Luisa Maria Jacinta C. Jocson
