PH investment Q1 net liability up 2%

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BSP: We owe more to the world due to market price revaluation

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The Philippines’ international investment position (IIP)—the value of the economy’s financial claims and liabilities with the rest of the world—posted a net liability of $43.2 billion in the first quarter of 2015, rising 6 percent from the previous quarter, the latest data released by the central bank on Wednesday showed.

The IIP is a companion framework to the country’s balance of payments (BOP) statistics.

The Bangko Sentral ng Pilipinas (BSP) said the Philippine economy owed more to the world during the period due mainly to revaluation adjustments arising from changes in market prices.

The net liability rose by $2.5 billion from the fourth-quarter 2014 level of $40.7 billion.

As of end-March, the country’s outstanding external financial liabilities reached a total of $193.4 billion, up 2 percent from the $189.5 billion at the end of the fourth quarter.

Net inflows from non-residents’ investments in Philippine equity securities (portfolio investments) and equity capital (direct investments) during the quarter contributed to the increase in financial liabilities as “investors’ appetite improved given the country’s strong macroeconomic fundamentals.”

On the other hand, outstanding external financial assets rose by $2 billion to $150.2 billion from the preceding quarter’s $148.5 billion, according to the BSP data.

The central bank noted that the increase in total external financial assets was primarily on account of investments in debt securities and in debt instruments (direct investments) that were issued by non-resident affiliates.

Compared with the BOP, which is a statistical statement that records the country’s transactions or flows with the rest of the world for a given period, the IIP summarizes the country’s stock of financial claims on and financial liabilities to the rest of the world.

Similar to the BOP’s financial account, the assets and liabilities in the IIP are classified as direct investments, portfolio investments, financial derivatives, and other investments.

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