Philippines’ international investment position up slightly

MANILA, Philippines - The value of foreign investments in the Philippines increased slightly in 2014 as stock prices surged  on the back of continued confidence in the Philippine economy.

Preliminary data on the country’s international investment position showed that the Philippines’ net liability position improved to $40.7 billion as the growth of external financial assets nearly tripled compared with its foreign debt.

The IIP is used to determine the net foreign investment of a country. It is a companion framework to the balance of payments statistics which records the country’s transactions or flows with the rest of the world for a given period.

Total outstanding external financial assets rose to $148.5 billion as of the end of December last year while total external liabilities amounted to $189.2 billion.

The rise in total external assets was largely due to outflows in other investments, more particularly resident’s currency and deposits abroad as well as increases in residents’ investments in external equity capital and debt securities.

As global growth prospects remain solid, especially in the US, China and India, residents started to scour investment opportunities offshore.

Across sectors,  only the BSP posted a net external asset position as of the end of December last year.

The BSP continued to hold the largest share of residents’ total liabilities to foreigners with its net liability position hitting  $80.1 billion.  This, however, was lower than the $80 billion recorded as of end as of the end of September 2014.

The other sectors accounted for 30.3 percent or $45 billion of total outstanding financial assets while banks held the remaining 15.8 percent or $23.4 billion.

According to the BSP, more than half of residents’ total holdings of external assets comprised reserve assets amounting to around $79.5 billion.

Investments in debt instruments or intracompany lending accounted for 13.6 percent of total external financial assets, equity capital (10.5 percent), residents’ deposits abroad (10 percent) and debt securities (6.7 percent).