THE Bangko Sentral ng Pilipinas (BSP) reported that the Philippines registered improvements in its liability position in the first three months of the year compared to the previous quarter.
Data showed the country posted a lower net liability position as of end-March this year at $15.3 billion. This is an improvement of 24.1 percent from the $20.2 billion net external liability position in December 2020.
The BSP said the improvement mainly owed to the 3.3-percent decrease in the country’s total external financial liabilities from $254 billion to $245.8 billion. This offset the decline in Filipinos’ foreign financial assets, which hit $230.4 billion during the period from $233.9 billion in end-December 2020.
“The decrease in total external financial liabilities during the quarter was due mainly to downward revaluation of foreign portfolio investments [FPI] and foreign direct investments [FDI] in equity instruments. This reflected the decline in the Philippine Stock Exchange index [PSEi] towards the end of the first quarter on the back of spike in Covid-19 cases during the period, the subsequent reimposition of containment measures, and concerns that these may impact on economic growth negatively,” the BSP said in a statement.
“Further, the repayments of maturing bond issuances by the national government [NG] as well as foreign loans by the banks contributed to the decrease in the external financial liabilities of the country,” the Central Bank added.
The outstanding financial liabilities of residents consisted largely of non-residents’ net investments in equity capital at $58.4 billion. Other major financial liabilities include foreign loans at $51.6 billion, debt instruments at $43.6 billion, equity securities at $42.3 billion and debt securities at $40.8 billion.
On the other hand, the decline in the stock of the country’s total external financial assets was driven mainly by lower level of gross international reserve (GIR) assets to $104.5 billion in end-March from $110.1 billion in the previous quarter. The lower GIR assets, the BSP said, is mainly due to the Central Bank’s diversification of foreign currency assets.
The BSP continues to hold the largest share of residents’ total claims on the rest of the world at 47.5 percent, amounting to $109.4 billion. The BSP’s external financial assets were mostly in the form of reserve assets and net placements in debt securities issued by non-residents.