PH net liability eases in Q3 – BSP

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The Philippines’ international investment position (IIP) was at a net liability of $29.3 billion as of the third quarter of 2015, data from the Bangko Sentral ng Pilipinas (BSP) showed.

The country’s net liability during the quarter was down 34.8 percent from $45 billion recorded a year earlier and 23.7 percent from the $38.5 billion seen in the second quarter.

Focusing on the quarter-on-quarter fall, the central bank said the Philippines owed less due to revaluation adjustments.

As of end-September, the country’s outstanding external financial liabilities reached $181.8 billion, down by 4.4 percent from $190.1 billion at the end of the second quarter.


“The decline in total external financial liabilities was mainly brought about by significant downward revaluation adjustments, particularly in non-residents’ investments in equity securities amid the weak performance of the Philippine Stock Exchange Index, which fell by 8.9 percent from end-June to end-September 2015,” the central bank said in a statement.

In addition, it said expectations of a US Federal Reserve rate lift-off toward the end of the year led to non-residents’ net withdrawals of portfolio investments.

Partly offsetting this was an increase in loans extended by non-residents to resident banks and borrowings by corporations from their affiliates abroad.

Outstanding external financial assets, meanwhile, increased by 0.6 percent to $152.5 billion from the preceding quarter’s $151.7 billion.

The central bank said the increase in total external financial assets was primarily due to residents’ direct and portfolio investments abroad, mostly in debt instruments and debt securities, respectively.

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

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, assets and liabilities in the IIP are classified as direct investments, portfolio investments, financial derivatives, and other investments.

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