PHL posts US$ 51-B net liability position at end-Sept ‘14

December 31, 2014 10:27 am 

MANILA, Dec. 31 — The Philippines International Investment Position (IIP) at end-September 2014 has posted a net liability of US$ 51.4 billion, higher by US$ 1 billion from end-June this year’s US$ 50.4 billion net liability position, the Bangko Sentral ng Pilipinas (BSP) said.

On a year-on-year basis, net liability position increased by US$ 5.2 billion from US$ 46.3 billion at end-September 2013.

The central bank’s IIP report stated that at as of end-September 2014, the country had a total external financial assets of US$ 139.8 billion and total external financial liabilities of US$ 191.3 billion, compared to end-June’s US$ 139.2 billion of external financial assets and US$ 189.6 billion of external financial liabilities.

“The US$ 1.6 billion increase in net asset position due to transactions during the third quarter of 2014 was more than offset by the negative revaluation adjustments on assets (particularly on the BSP’s international reserves) and the positive revaluation adjustments on liabilities (as domestic assets consisting mostly of equity securities appreciated in value),” BSP explained.

“This is on the back of the continued confidence of foreign investors in the country’s strong macro-economic fundamentals, including the credit rating upgrade by Japan-based Rating and Investment Information, Inc. (R&I) in July 2014. This reflected the improved performance of the domestic equities market, contributing to the appreciation of the value of domestic assets that were held by non-residents,” the central bank noted.

Across sectors, only the BSP had a net external asset position at end-September 2014 which also held the largest financial claims on the rest of the world amounting to US$ 80 billion or 57.2 percent of the total claims.

“The Other Sectors accounted for 28.8 percent or US$ 40.2 billion of total outstanding financial assets while Banks held the remaining 14 percent or US$ 19.6 billion,” the central bank added.

On the other hand, Other Sectors held US$ 124.5 billion or 65.1 percent of residents’ total liabilities to non-residents as of end-September this year. These liabilities were largely in the form of foreign direct investments and portfolio investments.

The General Government external liabilities at end-September amounted to US$ 37.4 billion while Banks’ total external liabilities ending at the same period was at US$ 27.9 billion.

“Outstanding financial liabilities of the domestic economy to the rest of the world consisted largely of non-residents’ holdings of equity securities (US$ 51.1 billion) and equity capital (US$ 47.1 billion) equivalent to 26.7 and 24.6 percent, respectively. Foreign loans accounted for 20.7 percent (US$ 39.6 billion) while debt securities – bonds and notes – issued by the National Government and Other Sectors comprised 16 percent (US$ 30.5 billion) of these foreign obligations,” BSP cited. (PNA)

LGI/KMC

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