Foreign investments push PH external liabilities to USD 68.3B

By Francis Allan L. Angelo

The Philippines’ net external liabilities rose to USD 68.3 billion as of end-June 2025, reflecting strong foreign investment inflows that outpaced the country’s asset growth abroad, according to the Bangko Sentral ng Pilipinas (BSP).

The figure marks a 44.1 percent increase from USD 47.4 billion in June 2024 and a 9.8 percent rise from USD 62.2 billion in March 2025, based on the latest International Investment Position (IIP) report.

The IIP measures the difference between what the Philippines owes the rest of the world and what it owns in terms of financial assets — providing a snapshot of the country’s financial interconnectedness and external exposure.

The growth in net liabilities was primarily driven by a 2.7 percent increase in total external financial liabilities, which reached USD 325.2 billion, up from USD 316.8 billion in March 2025.

In contrast, the country’s external financial assets rose by only 0.9 percent to USD 256.9 billion, from USD 254.6 billion in the previous quarter.

The BSP emphasized the importance of the IIP as a measure of external vulnerability and resilience, noting that it “helps to assess the sustainability of the country’s external position and exposure to international financial risks.”

Across sectors, the BSP retained its status as the top net creditor with USD 107.3 billion in claims on the rest of the world.

Meanwhile, the national government was the largest net debtor with USD 88.4 billion in obligations to nonresidents, followed by “Other Sectors” — including private corporations, households, and non-profits — which posted net liabilities of USD 85 billion.

Banks recorded a net debtor position of USD 2.2 billion.

In terms of total external assets, reserve assets comprised the largest share at USD 106 billion or 41.3 percent, followed by debt securities at USD 42.4 billion (16.5 percent), equity capital at USD 34.1 billion (13.3 percent), and currency and deposits at USD 15.9 billion (6.2 percent).

The remaining external assets included loans at USD 13.2 billion, equity securities at USD 7.1 billion, and other assets totaling USD 2.2 billion.

On the liabilities side, equity capital led the composition at USD 62 billion or 19.1 percent of the total, followed by loans at USD 83.8 billion (25.8 percent), debt instruments at USD 72.1 billion (22.2 percent), and debt securities at USD 56.4 billion (17.3 percent).

Other components of external liabilities included equity securities at USD 38.3 billion (11.8 percent), special drawing rights at USD 3.8 billion (1.2 percent), and miscellaneous items at USD 8.7 billion (2.7 percent).

Among institutional sectors, the BSP held the highest share of external financial assets at USD 111.2 billion or 43.3 percent.

Other sectors followed closely with USD 105.5 billion (41.1 percent), while banks held USD 40.2 billion or 15.7 percent.

The BSP noted that while the rise in liabilities indicates strong investor confidence in the Philippine economy, it also reflects the country’s growing dependence on foreign capital to finance development.

“The steady increase in foreign investments supports economic expansion, but it also underscores the need to monitor external debt sustainability,” the BSP said.

The IIP is computed by summing up the previous quarter’s IIP with balance of payments flows and other changes such as valuation effects.

The latest report is aligned with international statistical standards under the International Monetary Fund’s Balance of Payments and International Investment Position Manual, 6th Edition (BPM6).

As global markets remain volatile, the BSP reiterated its commitment to closely monitoring external accounts to ensure financial stability and sustainable economic growth.