PHL net external liabilities up at end-March

THE PHILIPPINES’ net external liability rose by 5.4% as of March from the quarter prior, the Bangko Sentral ng Pilipinas (BSP) said.

Data from the BSP’s Balance Sheet Approach (BSA) report showed that the country’s net liabilities climbed to P3.741 trillion at end-March from P3.548 trillion at end-December 2024.

Year on year, it went up by 24.6% from P3.002 trillion.

“The increase in the domestic economy’s net liabilities to the rest of the world was driven by nonresidents’ higher holdings of government-issued securities and growth in loans extended by nonresidents to the government,” the BSP said on Tuesday.

“Foreign borrowings of other depository corporations also rose, indicating greater reliance on external financing.”

The central bank said the general government (GG) posted higher net external liabilities.

In the first quarter, the GG’s net financial liability position expanded by 4.5% to P10.4 trillion to P9.9 trillion at end-December.

“This expansion was mainly driven by the sector’s increased net obligations to the rest of the world, other financial corporations and other depository corporations,” the BSP said.

Other depository corporations’ (ODCs) net external asset position also reversed to a net liability position, the BSP said. The net financial asset position of ODCs slipped by 0.5% to P1.507 trillion as of March from P1.515 trillion a quarter prior.

These contributed to the widening of the country’s overall net external liability position, although they were partly offset by the reversal of other financial corporations’ (OFCs) position to a net asset position from a net liability position.

Meanwhile, nonfinancial corporations’ net obligations eased in the first quarter, dropping by 0.3% to P11.4 trillion as of March from P11.5 trillion at end-December 2024.

On the other hand, households’ higher net claims on OFCs allowed its net financial asset position to widen by 1.9% quarter on quarter to P15.002 trillion from P14.729 trillion.

“This improvement was supported by the central bank’s lower net obligations to the ODCs and (households),” the BSP said. “However, these developments were partially offset by the central bank’s lower net claims on the GG.”

Based on the BSA, loans accounted for 35.8% of the Philippine economy’s external financial assets, while debt securities made up 32.3%.

Meanwhile, 46.3% of its external liabilities were in the form of loans, while 29.6% were investment fund shares.

The BSA contains a comprehensive overview of the Philippine economy’s financial position. It is published one quarter later than the International Investment Position, which serves as a key data source for the BSA and other sources for sectoral balance sheet data. — Katherine K. Chan