PHL international investment position net liability widens 9.8%

THE Philippines’ international investment position (IIP) came in at a net liability position of $68.3 billion at the end of June, up 9.8% from a quarter earlier, the Bangko Sentral ng Pilipinas (BSP) said.

Year on year, the net liability widened 44.1% to $47.4 billion.

“This increase was driven by inward foreign investments outpacing the country’s own investments abroad,” the central bank said in a statement.

The IIP is a gauge of the economy’s external exposure. The net position refers to the difference between assets and liabilities and represents either a net claim on or a net liability to the rest of the world.

External financial liabilities rose 2.7% quarter on quarter to $325.2 billion and by 11.8% from a year earlier.

Foreign direct investment rose 3.1% from a quarter earlier to $134.2 billion at the end of June, the BSP said.

“Nonresidents’ net investments in equity capital expanded 3.5% to $62 billion largely due to valuation adjustments from a broad decline of the dollar. Additionally, nonresidents’ net investments in debt instruments issued by residents increased 2.7% to $72.1 billion,” it added.

Foreign portfolio investment (FPI) rose 4.2% from a quarter earlier to $94.7 billion at the end of June.

Outstanding external financial assets rose 0.9% quarter on quarter to $256.9 billion and expanded 5.5% from a year earlier.

“The country’s external financial holdings rose by 0.9%, led by a 15.7% increase in loans extended by domestic banks to nonresidents, reaching $13.2 billion. Residents’ equity capital investments in their foreign affiliates likewise grew by 4.6% to $34.1 billion,” the BSP said.

The central bank held external financial assets worth $111.2 billion or 43.3% of the total, while the “other” category held $105.5 billion (41.1%) and banks $40.2 billion (15.7%). — Katherine K. Chan