The Philippines’ international investment position resulted in a net external liability of $35.2 billion as of end-September 2017, which means that foreign investments in the country continued to exceed Filipino holdings of international assets.
Data from the Bangko Sentral ng Pilipinas showed that the next external liability position in the third quarter increased by 5.1 percent from the second quarter.
“The higher negative balance was reflective of the 1.8-percent increase in total external financial liabilities for the period which outpaced the 1.1-percent growth in total external financial assets,” the Bangko Sentral said in a statement.
It said that as of end-September 2017, total outstanding external financial liabilities reached $201.8 billion, while total outstanding external financial assets amounted to $166.6 billion.
The stock of external financial liabilities in the third quarter grew mainly on account of the 4-percent increase in foreign direct investments and the 1.5-percent growth in foreign portfolio investments or “hot money.”
“The build-up was reflective of the significant investment inflows and positive price revaluation of non-residents’ holdings of local equity capital and equity securities on the back of the country’s sustained positive economic performance and growth prospects,” the BSP said.
Meanwhile, the improvement in external financial assets in the third quarter was due to the accumulation of portfolio (6 percent growth), direct (1.9 percent growth), and other investments (1.6 percent growth) abroad by residents despite the drop in the country’s reserve assets.
The Bangko Sentral registered a net external asset position as of end-September 2017, although this was lower than the level posted a quarter ago. In contrast, the other major sectors—deposit-taking corporations (banks, except the central bank), general government, and other sectors—remained net users (borrowers) of foreign resources.
Nonetheless, the net external position of banks and the general government continued to improve.
Almost half (48.6 percent) of the country’s total external financial claims, totaling $81 billion, were held by the BSP. The BSP’s gross international reserves, which comprised the bulk of its external financial assets, declined by 0.4 percent during the quarter to post $81 billion as of end-September 2017.