The country’s preliminary international investment position (IIP) improved to a net external liability position of $39.5 billion as of end-June 2019 from $41.3 billion in end-March 2019.
This development emanated primarily from the 2.7 percent increase in the country’s total external financial assets from $183.7 billion to $188.6 billion, outpacing the 1.4 percent growth in total external financial liabilities from $225 billion to $228.1 billion.
The country’s total external financial assets grew mainly on account of the $2.2 billion increase in residents’ other investments, specifically loans extended to non-residents.
This was complemented by the $1.4 billion additional direct investments and $1.3 billion increase in the country’s reserve assets.
Likewise, the country’s external financial liabilities or non-residents’ investments increased, reflecting fresh investment inflows, as well as the appreciation of the peso against the US dollar during the quarter.
In particular, foreign direct investments (FDI) rose by $3 billion to reach $89.6 billion as of end-June 2019 from $86.6 billion in end-March 2019.
By sector, only the BSP registered a net external asset position, which stood at $83.8 billion as of end-June 2019 due mainly to the increase in the country’s reserve assets.
Meanwhile, the other major sectors – Deposit-taking Corporations (Banks except the BSP), General Government, and Other Sectors – remained net users of foreign resources as they posted net external liability positions as of end-quarter.
On the assets side, the BSP continued to register the largest share of the country’s total external claims on the rest of the world at 45.1 percent or $85.1 billion as of end-June 2019. This was followed by Other Sectors at 38.2 percent or $72 billion and the banks at 16.7 percent or $31.5 billion.
By type of instrument, almost half of residents’ external financial assets were reserve assets held by the BSP as of end-June 2019 at $84.9 billion. Direct investments in the form of debt instruments and equity capital placements in foreign affiliates comprised 16.8 percent and 12.6 percent of the country’s total external assets, respectively.
Other assets were mostly in the form of debt securities that were issued by non-residents, residents’ holdings of foreign currency and deposits and outstanding loans extended to non-residents.
On the liabilities side, the Other Sectors accounted for the majority of the country’s total external financial liabilities as of end-June 2019 at $150 billion.
The General Government’s external liabilities totaled $40.2 billion while the Banks’ amounted to $36.6 billion, representing 17.6 percent and 16.1 percent of the country’s total external liabilities, respectively.
Meanwhile, the BSP’s share of the country’s total external financial liabilities was a modest 0.6 percent, which stood at $1.3 billion.
By type of instrument, the country’s total outstanding external financial liabilities as of end-June 2019 consisted largely of non-residents’ holdings of equity securities issued by local entities totaling $54 billion, non-residents’ placements of equity capital in resident affiliates at $53.2 billion, and residents’ availments of foreign loans amounting to $46.8 billion.
Other external financial liabilities include non-residents’ investments in debt instruments issued by resident affiliates at $36.4 billion and placements in debt securities issued by resident corporations at $29.1 billion.