THE COUNTRY recorded a slimmer net external liability position as of September, amid the pickup in the central bank’s reserve assets.
The international investment position (IIP) of the Philippines was at $21.1 billion as of September, based on preliminary data from the Bangko Sentral ng Pilipinas (BSP). This is lower by 7.3% than the $22.7 billion in net external liability seen as of June.
However, the net external liability position was twice (104%) the $10.3 billion seen as of end-September 2020.
The IIP takes stock of a country’s financial assets and liabilities.
Based on central bank data, the country’s external financial liabilities rose by 0.7% to $166.2 billion as of end-September from $165 billion as of end-June.
The BSP said the boost in the special drawing rights (SDRs) allocation to the country from the International Monetary Fund (IMF) pushed the country’s external financial liabilities higher. This was also supported by the 5.5% growth in non-residents’ investments in debt instruments issued by their local affiliates worth $47.3 billion, the central bank added.
To recall, the Philippines received $2.8 billion in SDR in August as the IMF sought to help countries recover from the coronavirus pandemic.
The BSP said other sectors accounted for nearly two-thirds of these financial liabilities.
“The expansion was attributable to the 5.5% and 8.2% increases in the stock of debt instruments and debt securities issued by local corporations, which settled at $47.3 billion and $10.3 billion, respectively,” the central bank said.
Meanwhile, external financial assets rose 0.8% to $111.4 billion as of end-September coming from $110.8 billion at the end of the previous quarter. Its growth was faster than the rise in external financial liabilities.
Nearly half (46.7%) of the external financial assets are reserve assets held by the BSP.
Direct investments in the form debt instruments and equity capital made up 15.5% and 12% of the external financial assets. Meanwhile, 12.9% are portfolio investments in the form of debt securities. — Luz Wendy T. Noble