Preliminary data on the country's international investment position (IIP) as of end-September 2018 registered a net external liability position of US$34.4 billion. This level was 20.5 percent higher than the US$28.5 billion external liability position recorded as of end-June 2018. The higher net external liability position reflected the US$7.1 billion (3.6 percent) expansion in the country's total external financial liabilities to record US$205.3 billion, offsetting the marginal increment of US$1.2 billion (0.7 percent) in the total external financial assets, which registered US$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). 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.
Meanwhile, the country's external financial assets registered a modest growth despite the US$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 US$3.9 billion collective growth across other investments (6.8 percent), portfolio investments (6 percent), and direct investments (2.5 percent).
Across sectors, only the Bangko Sentral ng Pilipinas (BSP) posted a net external asset position, which amounted to US$73.8 billion as of end-September 2018.
The BSP continued to account for the largest share of the country's total financial claims to the rest of the world at 43.9 percent or US$75.1 billion as of end-September 2018. Outstanding claims of the Other Sectors from non-residents represented about 40 percent of the country's total external financial assets, while Banks accounted for the remaining 16.1 percent of the country's total external financial assets, which amounted to US$27.5 billion.
By type of instrument, the BSP's reserve assets comprised the bulk or 43.8 percent of the country's external financial assets at US$74.9 billion as of end-September 2018. Outstanding investments in debt instruments (or intercompany lending) issued by non-resident affiliates and equity capital accounted for 17.5 percent (US$29.9 billion) and 13.3 percent (US$22.7 billion), respectively.
The Other Sectors' total external financial liabilities at US$135.8 billion as of end-September 2018, accounted for about two-thirds of the country's total external financial liabilities. These liabilities comprised mostly of non-residents' investments in equities of affiliate and non-affiliate local entities as well as loans extended by non-resident creditors to residents. This level was higher than the sector's external financial liability position of US$129.9 billion as of end-June 2018.
As of end-September 2018, the outstanding financial liabilities of residents to the rest of the world comprised mostly of non-residents' holdings of equity securities issued by residents (23.1 percent), investments in equity capital of resident affiliates (22.6 percent), and foreign outstanding loans extended by non-residents (20.6 percent). Other external financial liabilities include non-residents' investments in debt instruments issued by resident affiliates (16.1 percent) and debt securities issued by residents (13.3 percent).
Source: Bangko Sentral ng Pilipinas (BSP)