Philippines improves net liability position in H1

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) reported yesterday the country’s preliminary International Investment Position (IIP) recorded an improvement in net liability in the first half.

In a report, the BSP said the country’s IIP registered a net liability position of $39.2 billion as of end-June, 11 percent lower compared to $44.13 billion net liability booked in the same period last year.

The central bank attributed the improvement to the increase in total financial assets as well as the decline in total financial liabilities from January to June.

The net international investment position is the difference between the country’s external financial assets and liabilities.

Data showed total financial liabilities declined 2.65 percent to $190.12 billion in end June from $185.22 billion in end June last year, while total assets grew 6.96 percent to $150.91 billion from $141.08 billion.

 “This was due to the decrease in total financial liabilities coupled with the increase in total financial assets,” the BSP said.

The central bank said the decrease in total external financial liabilities was due mainly to revaluation adjustments arising from changes in market prices.

It added the redemption of resident-issued portfolio investments held by non-residents also contributed to the decrease in financial liabilities.

On the other hand, the BSP said the higher total external financial assets was largely on account of residents’ investments in equity and debt securities issued by non-residents as well as the increase in residents’ direct investments abroad.

Across sectors, only the BSP maintained a net external asset position as of end June with $1.35 billion.

Meanwhile, banks and other deposit-taking corporations registered a net liability of $7.1 billion in end June, while government-owned and controlled corporations (GOCCs) recorded a net liability of $36.33 billion.

Other sectors also registered a net external liability position of $75.77 billion as of end June this year.

The BSP continued to hold the largest share with 53.9 percent of residents’ total claims on the rest of the world amounting to $81.3 billion as of end June followed by the other sectors with 31.8 percent or $47.9 billion.

More than half or 53.4 percent or $80.6 billion of residents’ total holdings of external assets as of end June were reserve assets held by the BSP while investments in debt instruments issued by foreign affiliates or intercompany loans accounted for 14.4 percent.