Net external liability higher as of end-Dec

THE country’s net external liability position rose at the end of December last year, the Bangko Sentral ng Pilipinas (BSP) reported late Wednesday.

This was due to the 4.9-percent expansion in external liabilities having outpacing 4.3-percent growth in external assets.

At $51.3 billion, the net external liability position was 8.1 percent higher than the $47.5 billion posted three months earlier and up 25.2 percent from $41.0 billion in December 2022.

Outstanding external financial assets totaled $241.4 billion, while external financial liabilities reached $292.8 billion.

External financial assets surged as reserves rose to $103.8 billion, up from $98.1 billion as of end September.

This was driven by factors including upward adjustments in the BSP’s foreign currencydenominated reserves and gold holdings, government foreign currency deposits, income from the BSP’s overseas investments, and net foreign exchange operations.

Residents’ net direct investments in foreign debt instruments also rose by 3.8 percent to $42.7 billion, while net deposits in foreign banks rose by 11.5 percent to $15.3 billion.

As for external financial liabilities, other investments rose by 7.9 percent to $72.5 billion, while foreign portfolio investments (FPI) grew 5.7 percent to $85.8 billion, driven by strong investor interest in government bond issuances. Foreign direct investments (FDI), meanwhile, were up 3.7 percent to $122.6 billion.

Year on year, total external financial liabilities grew by 8.3 percent, with other investments up 13.4 percent, FDI by 8.2 percent, and FPI by 4.0 percent.

“The expansion in FDI and FPI reflects investor confidence in the Philippine economy on the back of the country’s growth and improved domestic inflation dynamics,” the BSP said.