The Philippines’ net external liability position dropped 3.6 percent to P2.9 trillion in the second quarter of 2024 from P3 trillion in the first quarter 2024 on higher net external asset position of the Bangko Sentral ng Pilipinas (BSP).
This was partially tempered by the increased net external liability position of the general government.
The International Investment Position (IIP) is a statistical statement that shows at a point in time the value of financial assets of residents of an economy that are claims on non-residents or are gold bullion held as reserve assets and the liabilities of residents of an economy to non-residents.
The difference between the assets and liabilities is the net position in the IIP and represents either a net claim on or a net liability to the rest of the world.
By sector, the general government’s net financial liability position grew by 3.4 percent quarter-on-quarter to P10.2 trillion from P9.9 trillion.
This was driven by the additional financing provided by non-residents to the general government in the form of debt securities and loans, along with the decrease in the sector’s deposits with the Central Bank. The other depository corporations’ holdings of government securities also increased.
The BSP said that on an annual basis, the general government’s net financial liability position rose as the government security holdings of the other depository corporations, the rest of the world and the other financial corporations expanded. The sector’s loans payable to non-residents also grew.
The non-financial corporations’ net financial liability position widened by 2.3 percent quarter-on-quarter to P9.8 trillion from P9.5 trillion. This resulted primarily from the rise in loans payable to the other depository corporations, coupled with the decrease in the sector’s deposits in the banking system.
It said that on a year-on-year basis, the non-financial corporations’ net financial liabilities expanded due to the rise in the sector’s loans payable to the rest of the world, alongside the decline in the sector’s holdings of debt securities issued by non-residents. Likewise, the sector’s loans payable to the other depository corporations grew.
Meanwhile, issuances of equity and investment fund shares to the other financial corporations expanded.
The households’ net financial asset position rose by 1.3 percent quarter-on-quarter to P14 trillion from P13.8 trillion driven by the increase in the sector’s bank deposits.
The sector’s investments of equity and investment fund shares issued by the other financial corporations and the sector’s holdings of currencies issued by the BSP increased.
It said that on an annual basis, the households’ net financial asset position increased due to the sector’s higher bank deposits and increased investments in equity and investment fund shares, as well as insurance, pension and standardized guarantee schemes issued by the other financial corporations.
The other depository corporations’ net financial asset position increased by 12.7 percent quarter-on-quarter to P1.6 trillion from P1.4 trillion due to the rise in loans receivable from and lower deposit liabilities to the non-financial corporations.
