By Lee C. Chipongian
The country’s international investment position (IIP) as of end-September 2018 had a net external liability position of $34.4 billion, 20.5 percent higher than the previous quarter’s $28.5 billion, the Bangko Sentral ng Pilipinas (BSP) reported over the weekend.
The total external financial liabilities were up by 3.6 percent during the quarter to $205.3 billion and the BSP this offset the “marginal increment of $1.2 billion (0.7 percent) in the total external financial assets, which registered $170.9 billion in end-September 2018.”
“The rise in the country’s total external financial liabilities stemmed from the combined increases in the other investments (6.8 percent), foreign portfolio investments (3 percent) and foreign direct investments (2.2 percent),” the BSP explained. “In particular, residents’ outstanding loans from non-resident creditors, outstanding intercompany borrowings from their non-resident-related parties, and outstanding non-residents’ investments in debt and equity securities issued by residents rose during the period.”
The BSP statement further explained that the country’s external financial assets amounted to $167.89 billion “despite the $2.6 billion decline in the BSP’s reserve assets as of end-September 2018.” The decline in reserve assets was more than compensated by the $3.9-billion collective growth across other investments (6.8 percent), portfolio investments (six percent), and direct investments (2.5 percent), it added.
The central also registered a net external asset position of $73.8 billion as of end-September 2018.
The BSP is still the biggest contributor of total financial claims to the rest of the world at 43.9 percent or $75.1 billion. On the other hand, the outstanding claims of the Other Sectors from non-residents accounted for 40 percent of the country’s total external financial assets.
Banks had 16.1 percent of the total external financial assets worth $27.5 billion.
Other Sectors include other financial corporations such as money market funds, non-money market investment funds, other financial intermediaries except insurance corporations and pension funds, financial auxiliaries, captive financial institutions and money lenders, insurance corporations, and pension funds; nonfinancial corporations; households; and nonprofit institutions serving households.
“By type of instrument, the BSP’s reserve assets comprised the bulk or 43.8 percent of the country’s external financial assets at $74.9 billion as of end-September 2018 (while) outstanding investments in debt instruments (or intercompany lending) issued by non-resident affiliates and equity capital accounted for 17.5 percent ($29.9 billion) and 13.3 percent ($22.7 billion), respectively,” the BSP noted.