Philippines net external liability position widens to $48.8 B in Q4

MANILA, Philippines — The country’s net external liability position widened in the last quarter of 2018 due to the rise in foreign investment inflows, according to the Bangko Sentral ng Pilipinas.

In a statement, the central bank said the country’s international investment position (IIP) as of end-December 2018 registered a net external liability of $48.8 billion, 39 percent higher than the $35.1 billion net liability posted in the previous quarter.

IIP is a stock estimate of the country’s foreign financial assets and foreign financial liabilities outstanding as of a certain period. A net liability position happens when the country’s liabilities exceed its assets.

According to the BSP, the negative balance in the country’s net IIP  was driven by the 9.1 percent increase in the country’s total external financial liabilities to $224.4 billion.

This more than offset the 2.9 percent growth in total external financial assets, which reached $175.6 billion as of end-December 2018.

“The increase in the country’s external financial liabilities was buoyed mainly by the 17.3 percent rise in foreign portfolio investments (FPI) to $87.6 billion from $74.7 billion as of end-September 2018,” the BSP said.

Likewise, the BSP said foreign direct investments and other investments posted positive growth during the period to reach $83 billion and $53.6 billion, respectively.

“Meanwhile, the country’s higher external financial assets was mostly attributed to the accumulation of reserve assets, which grew to $79.2 billion as of end-December 2018, from $74.9 billion in the previous quarter. This was complemented by the 5.9 percent increase in portfolio investments and the 0.5 percent growth in other investments,” the BSP said.

Across sectors, only the BSP posted a net external asset position, which amounted to $78.1 billion in the fourth quarter of 2018. In contrast, other sectors remained net users of foreign resources as they posted net external liability positions.