Phl’s net liability position up in June

The country’s international investment position (IIP) weakened as of end-June due to higher net liability position, according to the Bangko Sentral ng Pillipinas (BSP).

According to preliminary IIP data, the country’s net external liability position reached $33.8 billion, higher than the end-March level of $29.2 billion.

This came as external financial liabilities rose 3.2 percent to $198.3 billion as of June from $192.24 billion as of end-March, outpacing the 0.9 percent growth of external financial assets to $164.53 billion from $162.99 billion.

IIP is a stock estimate of the country’s foreign financial assets and foreign financial liabilities outstanding as of a certain period.

According to the BSP, the growth in external financial liabilities during the quarter can be attributed to the positive price revaluation of non-residents’ holdings of domestic equity securities and equity capital.

“Inflows of foreign direct and portfolio investments likewise contributed to the increase in the country’s external financial liability position,” the BSP said.

As of end-June, foreign direct investments expanded 4.9 percent to $70.11 billion from its end-March level on the back of the sustained economic growth performance and prospects of the Philippines.

Portfolio investments rose 4.8 percent to $78.82 billion over the same period, reflecting the 7.3 percent growth in the Philippine Stock Exchange Index.

Meanwhile, the BSP said the increase in external financial assets for the period ending June was driven by the increase in other investments, particularly those in the form of loans extended to non-residents, and the accumulation of the country’s reserve assets.

Across sectors, the BSP said it is the only one that has maintained a net external asset position as of end-June.

“The other major sectors – deposit-taking corporations except central banks, the general government, and other sectors – remained net users of foreign resources as they posted net external liability positions,” the central bank said.

The BSP said it also continued to account for the largest share of the country’s total external financial claims at 49.5 percent.

As of end-June, the BSP’s external financial assets amounted to $81.4 billion, the bulk of which consisted of gross international reserves, which grew to $81.3 billion as of end-June.