Phl net external liability narrows to $58.2B in Q3

The Philippines’ net external liability position narrowed to $58.2 billion as of end-September 2025, reflecting stronger foreign asset holdings and reduced external obligations, according to data from the Bangko Sentral ng Pilipinas (BSP).

The country’s International Investment Position (IIP)—which measures what residents own abroad versus what they owe to nonresidents—improved by 13.2% quarter-on-quarter from $67.0 billion at end-June. The net liability also declined to 12.1% of gross domestic product (GDP), down from 14.1% in the previous quarter, indicating reduced external vulnerability.

Total Philippine investments in foreign financial assets rose 1.9% to $263.9 billion, while foreign investments in Philippine assets fell 1.2% to $322.1 billion, contributing to the improved position.

The BSP said the IIP serves as a key gauge of the country’s financial linkages with the rest of the world, offering insights into resilience against external shocks by tracking cross-border assets and liabilities.

By sector, the central bank remained the largest holder of foreign assets at $113.6 billion, accounting for 43% of total external assets. Other sectors, including non-financial corporations and households, followed with $109.1 billion, or 41.3%, while banks held $41.2 billion, or 15.6%.

On the liabilities side, foreign investments in Philippine assets were concentrated in other sectors, which accounted for $188.9 billion, or 58.6% of the total. The national government posted $89.9 billion in foreign liabilities, representing 27.9%, while banks accounted for $39.4 billion, or 12.2%.

The BSP remained a net creditor to the rest of the world, while the national government and other sectors continued to be net debtors, reflecting ongoing reliance on external financing for public spending and private investment.

The BSP said movements in the IIP during the quarter were influenced not only by balance of payments flows but also by valuation effects such as exchange rate movements and market price changes.