The uptick was mainly due to higher holdings of government-issued securities by nonresidents and increased loans extended to the national government. Foreign borrowings of other depository corporations also went up, reflecting greater reliance on external financing.
The country’s net external liability climbed in the first quarter of 2025 as the government leaned more on foreign borrowings, data from the Bangko Sentral ng Pilipinas (BSP) showed.
Preliminary figures under the Balance Sheet Approach (BSA) revealed that the Philippines’ net external liability increased by 5.4 percent to P3.7 trillion in Q1 2025 from P3.5 trillion in the previous quarter.
The BSP said the uptick was mainly due to higher holdings of government-issued securities by nonresidents and increased loans extended to the national government. Foreign borrowings of other depository corporations also went up, reflecting greater reliance on external financing.
Net debtor position expanded further
The general government’s net debtor position expanded further as government securities continued to make up three-fourths of its obligations. Still, the central bank noted that more than two-thirds of these liabilities were denominated in pesos, which partly shielded the government from exchange rate risks.
On the other hand, households remained the economy’s top net creditor. Their financial position improved slightly in Q1, supported by increased investments in equity and fund shares issued by financial corporations.
Households highly solvent
However, the BSP observed that declines in household bank deposits and currency holdings, alongside higher bank loans, tempered the improvement. Despite this, households stayed “highly solvent,” with their gross financial assets nearly three times larger than their obligations.
The BSP explained that the Balance Sheet Approach provides a comprehensive view of the economy’s financial standing.
It is released one quarter later than the International Investment Position, which serves as a key data source for the BSA together with other sectoral balance sheet statistics.
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