HIGHER investment inflows widened the country’s net external liability position at end-June, the Bangko Sentral ng Pilipinas (BSP) said late Thursday.
Preliminary data released by the BSP showed the country’s international investment position (IIP) stood at a net external liability of $23 billion as of June, 54.3% increase from the $14.9 billion seen at end-March. This was also 22.1% wider than the $18.8 billion seen as of June 2020.
The IIP takes stock of a country’s financial assets and liabilities.
BSP data showed the country’s external financial liabilities grew 5% to $258 billion as of June from $245.7 billion at end-March. Year on year, it rose by 14.8% from $224.8 billion.
Other sectors accounted for 63.9% or $165 billion of the country’s total external financial liabilities. The rest was held by the national government and banks, which held financial liabilities worth $58.5 billion and $33.2 billion, respectively.
“The expansion in residents’ external financial liabilities stemmed mainly from the increases posted in outstanding foreign portfolio investments, both in the form of debt securities and equity and investment fund shares, FDI (foreign direct investments), and other investments,” the central bank said.
Net FDI inflows increased 40.7% year on year to $4.298 billion in the first half of 2021.
Meanwhile, short-term portfolio investments yielded a net inflow of $334.51 million in June, turning around from the net $235.14-million that left the country a year earlier. However, hot money posted a net outflow of $106 million in the first six months of 2021, smaller than the $3.3 billion seen in the same period of 2020.
The increase in liabilities outpaced the 1.8% growth in the country’s external financial assets to $235 billion as of June from $230.8 billion at end-March. It also rose 14.1% year on year from the $206 billion logged at end-June 2020.
The BSP held 47.1% or $110.8 billion of the country’s total external financial claims.
Among these financial assets, 45% or $105.8 billion were in the form of reserves. The claims also include debt instruments (15.5%) equity and investment fund shares (12.2%), and portfolio investments (13.2%). — LWTN