THE national government’s recent bond issuances contributed to the net liability position of the country’s net international investment position (IIP), according to the Bangko Sentral ng Pilipinas (BSP).
Preliminary data showed the country’s net liability position of $51.3 billion as of end-December 2023, higher by 8.1 percent than the $47.5 billion recorded in end-September 2023.
BSP said total outstanding external financial liabilities reached $292.8 billion, while total outstanding external financial assets amounted to $241.4 billion.
“This development was driven by the 4.9-percent expansion in the country’s external financial liabilities, outpacing the 4.3-percent growth in external financial assets,” BSP said.
BSP said the country’s total stock of external financial liabilities as of end of the fourth quarter of 2023 rose, as all components registered an increase, except for financial derivatives.
The data showed that other investments in the form of foreign loans increased by 7.9 percent, from $72.5 billion to $67.2 billion.
BSP explained that the national government had issued Sukuk Bonds amounting to $1 billion in December 2023.
“Foreign portfolio investment [FPI] also increased by 5.7 percent to $85.8 billion from $81.1 billion on the back of strong investor interest in bond issuances by the National Government [NG],” BSP said.
“Foreign direct investment [FDI] rose by 3.7 percent to $122.6 billion from $118.2 billion.”
Meanwhile, BSP traced the increase in the stock of the country’s external financial assets as of end-December 2023 to higher reserve assets, reaching $103.8 billion from $98.1 billion as of end-September 2023.
The data also showed the residents’ net direct investments in foreign debt instruments rose 3.8 percent to $42.7 billion.
BSP said net deposits of currency and deposits in banks abroad increased 11.5 percent to $15.3 billion.
“The higher level of reserves was attributed to the upward adjustments in the BSP’s foreign currency-denominated reserve assets [or non-gold reserves] and gold holdings, the NG’s net foreign currency deposits with the BSP, net income from the BSP’s investment abroad, and the BSP’s net foreign exchange operations,” BSP said.
On a year-on-year basis, BSP said the country’s net external liability position expanded by 25.2 percent from $41 billion as of the end of December 2022.
This was because of the increase in total external financial liabilities by $22.5 billion, which outpaced that of total external financial assets by $12.2 billion.
IIP is a statistical statement that shows at a point in time the value of financial assets of residents of an economy that are claims on non-residents or are gold bullion held as reserve assets, and the liabilities of residents of an economy to non-residents.
The difference between the assets and liabilities is the net position in the IIP and represents either a net claim on or a net liability to the rest of the world.
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