The country’s preliminary net international investment position improved in the first quarter of the year, posting a lower net external liability position of $42.2 billion as of end-March 2019 from $48.8 billion as of end-December 2018, the central bank said.
This improvement stemmed primarily from the 4.1-percent increase in the country’s total external financial assets (or investments of residents abroad) from $175.6 billion to $182.8 billion, which compensated for the marginal growth of 0.3 percent in total external financial liabilities (or investments of nonresidents in the Philippines) from $224.4 billion to $225 billion.
The growth in the country’s total external financial assets emanated mainly from the combined increases in reserve assets (which increased by 5.6 percent from $79.2 billion to $83.6 billion), residents’ investments in equity capital and debt instruments of foreign affiliates (which rose by 4.1 percent from $51.9 billion to $54 billion) and residents’ holdings of debt and equity securities issued by nonresidents (which grew by 4.1 percent from $20.5 billion to $21.3 billion).
Meanwhile, the growth in the country’s total external liabilities during the quarter was driven by the expansion of 4.4 percent in foreign direct investments from $83 billion to $86.6 billion, and the increase of 4.2 percent in nonresidents’ other investments from $53.6 billion to $55.8 billion. These increases, however, were tempered by the 6.1 percent contraction in nonresidents’ holdings of portfolio investments from $87.6 billion to $82.3 billion.
Across sectors, only the Bangko Sentral ng Pilipinas registered a net external asset position, with $82.5 billion as of end-March 2019.
Banks’ net external liability position grew by 6.4 percent from $6.6 billion to $7 billion, while that of the national government rose from $40.1 billion to $40.2 billion. By contrast, the external liability position of the other sectors improved during the end of the quarter, posting a 3.4-percent decline to settle at $77.4 billion from $80.2 billion.
In terms of the total external financial assets, the BSP accounted for the largest share at 45.8 percent, or $83.8 billion, as of end-March 2019. Other sectors’ total external financial assets reached $69.6 billion, comprising 38.1 percent of the total external financial assets of the country. Banks accounted for the remaining 16.1 percent of the country’s total external financial claims, amounting to $29.4 billion as of end-March 2019.
By type of instrument, reserve assets held by the BSP constituted the largest share at 45.7 percent ($83.6 billion) of the country’s external financial assets as of end-March 2019. This was followed by residents’ investments in equity capital and debt instruments of foreign affiliates at 29.5 percent ($54 billion).
On the liabilities side, other sectors accounted for 65.4 percent, or $147.1 billion, of the country’s total external financial liabilities as of end-March 2019. Meanwhile, the national government’s external liabilities amounted to $40.2 billion, comprising 17.9 percent of the country’s total external liabilities.
Banks’ total external liabilities reached $36.4 billion during the quarter in review, equivalent to 16.2 percent of the country’s total external liabilities. The BSP’s share of the country’s total external financial liabilities was a modest 0.6 percent, or $1.3 billion.