The country incurred more liabilities from its international investments as it posted a net liability position of $51.3 billion as of end-December 2023 or 8.1 percent higher than the end-September level.
The Bangko Sentral ng Pilipinas (BSP) said this was the result of the higher growth in the country’s foreign financial liabilities at 4.9 percent compared to the 4.3 percent increase in its foreign financial assets during the period.
Consequently, the full-year external financial liabilities reached $292.8 billion or 8.3 percent higher than the 2022 level.
Breaking it down, the country’s loan-based investments grew by 7.9 percent to $72.5 billion from $67.2 billion.
The BSP said foreign demand for government-issued bonds increased, expanding the country’s foreign investment portfolio by 5.7 percent to $85.8 billion.
The portfolio included the Sukuk or Islamic bonds issued by the government last December, providing it with an additional $1 billion fund.
Out of total external financial liabilities, non-financial institutions accounted for 60.6 percent. Their liabilities grew by 4.2 percent to $177.5 billion quarter-on-quarter.
Private banks represented 12.3 percent and accumulated $36 billion in liabilities, while the BSP accounted for 1.3 percent and owed foreign investors $3.8 billion.
Foreign ownership of Phl assets
Meanwhile, foreign ownership of Philippine assets under foreign direct investments rose by 3.7 percent to $122.6 billion.
On the other hand, the country acquired less external financial assets at $241.4 billion as of end-December compared to $292.8 billion in liabilities.
However, this was higher than the $231.6 billion in foreign financial assets recorded as of end-September.
Foreign reserves grew to $103.8 billion from US$98.1 billion due to higher gold and non-gold holdings, foreign currency deposits of the national government with the BSP, and foreign exchange activities by the central bank.
The BSP held the most foreign assets, with 44.9 percent share and an investment value of $108.5 billion.
Non-banks accounted for 41 percent and gained $99 billion in foreign assets, while banks represented 14.1 percent and had $33.9 billion.
On a year-on-year basis, the country’s net external liability position expanded by 25.2 percent from $41 billion in 2022.
For this year, credit analyst S&P Global Ratings sees a pessimistic trend in foreign direct investments to the Philippines.
“We expect investments to continue to decelerate even further this year due to lagged impact of the rate hikes. We don’t expect a strong global economy this year,” S&P senior economist Vince Conti said.
Michael Ricafort, chief economist of Rizal Commercial Banking Corporation, said local investors could remain liquid as they gained returns from the government’s retail Treasury bonds with maturity period early this month on 9 to 12 March.
