The Philippines' international investment position remained a net external liability in the first quarter. The net liability widened 8.1% from the previous quarter to $54.924 billion amid heightened market volatility.
Year‑on‑year, the net liability narrowed 2%, representing 11.2% of gross domestic product. This ratio rose from 10.4% recorded in the prior quarter.
The widening stemmed from a faster decline in external financial assets than liabilities. Lower reserve assets, driven by central bank foreign‑exchange operations and government drawdowns on foreign‑currency deposits for debt servicing, were the primary cause.
Higher bond yields linked to geopolitical uncertainty and a weak global outlook also reduced the valuation of external assets. The effect was most pronounced in foreign‑issued debt securities.
The international investment position measures the balance between foreign assets and liabilities, offering a snapshot of external exposure. It serves as a key indicator of external vulnerability and financial stability.
Foreign asset holdings fell 2.1% quarter‑over‑quarter to $258.625 billion, though they were 1.6% higher than a year earlier. The decline reflects broader market pressures on external asset values.
Reserve assets dropped 3.8% to $106.6 billion, reflecting central bank operations and government drawdowns. Higher global gold prices provided modest valuation gains but did not offset the overall decline.
The central bank accounted for 42.7% ($110.4 billion) of total foreign assets, while banks held 15.5% ($40 billion). Other sectors invested $108.2 billion, representing 41.8% of the total.
Residents’ foreign investments were dominated by reserve assets ($106.6 billion, 41.2% of total), followed by debt instruments ($41.3 billion, 16%). Other holdings included debt securities, equity capital, currency and deposits, loans, and equity securities.
External financial liabilities decreased 0.4% quarter‑over‑quarter to $313.549 billion, while rising 0.9% year‑on‑year. The modest easing reflects adjustments in borrowing patterns.
The general government accounted for 28.5% ($89.3 billion) of external liabilities, banks 11.6% ($36.3 billion), the central bank 1.2% ($3.9 billion), and other sectors 58.7% ($184.2 billion). These figures illustrate the distribution of overseas obligations.
Loans comprised 26.4% ($82.8 billion) of external liabilities, with debt instruments representing 24.4% ($76.6 billion). Equity capital, debt securities, equity securities, and currency and deposits made up the remainder.
The national government remained a net debtor with $89.3 billion in liabilities. Other sectors—including financial corporations, non‑financial corporations, households, and nonprofit institutions—held $76 billion in external financial liabilities.
The central bank acted as a net lender, extending $106.6 billion abroad, while banks lent $3.8 billion. This lending stance contributed to the overall external position.
