Philippine external liability narrows in December 2025

The Philippines’ net external liability position narrowed to USD 50.8 billion at the end of December 2025, equivalent to 10.4 percent of gross domestic product, as the country’s foreign assets grew faster than its foreign liabilities, according to Bangko Sentral ng Pilipinas data.

That was a 2.5 percent improvement from the USD 52.1 billion net liability position recorded at the end of September 2025, when it stood at 10.8 percent of GDP.

The international investment position, or IIP, is a statistical statement that shows the value, at a given point in time, of residents’ financial claims on nonresidents and gold bullion held as reserve assets, as well as residents’ liabilities to nonresidents. The gap between those assets and liabilities indicates whether an economy is a net creditor or a net debtor to the rest of the world, and is widely used to assess external vulnerability and resilience.

As of end-December 2025, the country’s total external financial assets reached USD 264.1 billion, up 1.0 percent quarter on quarter from USD 261.5 billion and up 5.4 percent from USD 250.5 billion a year earlier.

External financial liabilities climbed more slowly to USD 314.9 billion, rising 0.4 percent from USD 313.6 billion in end-September 2025 and 4.4 percent from USD 301.7 billion in end-December 2024.

On a year-on-year basis, the net external liability position improved by 0.7 percent from USD 51.2 billion at end-December 2024 to USD 50.8 billion by end-December 2025.

The BSP said the quarterly improvement reflected broad gains in the country’s stock of external financial assets across major components. Reserve assets rose 1.6 percent to USD 110.8 billion in December 2025 from USD 109.1 billion in September 2025.

Residents’ outward direct investments also increased, with equity capital investments in foreign affiliates climbing 2.6 percent to USD 35.6 billion, supported by additional equity infusions by Philippine firms and favorable global equity market-driven valuation gains.

Residents’ holdings of foreign equity securities grew 4.1 percent to USD 7.6 billion, mainly due to net equity acquisitions.

Placements in currency and deposits abroad increased 4.5 percent to USD 16.7 billion, reflecting higher overseas deposit placements by domestic banks.

The country’s outstanding external liabilities posted only a modest increase in the fourth quarter. Nonresidents’ investments in debt instruments rose 1.5 percent to USD 75.3 billion, while outstanding foreign loans expanded 1.3 percent to USD 81.6 billion because of additional borrowings by the general government and other sectors.

Nonresidents’ holdings of equity securities edged up 1.5 percent to USD 35.2 billion, primarily because of positive price valuation effects.

Equity capital liabilities also inched up 0.8 percent to USD 59.3 billion, reflecting net equity inflows largely from Japan, the United States and South Korea, alongside improved market valuations.

Those trends were consistent with the stronger performance of the Philippine Stock Exchange Index, which rose 1.7 percent to 6,052.92 at end-December 2025 from 5,953.46 at end-September 2025.

The BSP and banks remained net lenders of resources to the rest of the world by institutional sector, while the national government and other sectors stayed net debtors. The central bank posted a net creditor position of USD 111.0 billion, while banks posted a net creditor position of USD 2.0 billion.

By contrast, the national government recorded a net debtor position of USD 88.4 billion, while other sectors posted a net debtor position of USD 75.4 billion. Other sectors cover other financial corporations, nonfinancial corporations, households and non-profit institutions serving households.

The BSP continued to hold the largest share of the country’s total external financial assets at 43.5 percent, valued at USD 114.9 billion as of end-December 2025. That was up 1.1 percent from USD 113.6 billion at end-September 2025, driven mainly by the increase in reserve assets.

The increase in reserves was attributed to the national government’s net foreign currency deposits with the central bank, upward valuation adjustments in the BSP’s gold holdings, and the BSP’s net income from its investments abroad.

Other sectors accounted for 40.8 percent of total external assets and increased their holdings by 1.1 percent to USD 107.9 billion in end-December 2025 from USD 106.7 billion in end-September 2025, mainly because of higher investments in equity capital, equity securities and debt securities.

Deposit-taking corporations excluding the central bank held the remaining 15.7 percent of total external assets, with their asset position rising 0.4 percent to USD 41.4 billion from USD 41.2 billion, largely because of higher net placements of currency and deposits abroad.

By instrument type, the largest share of residents’ total external financial assets was reserve assets at 42.0 percent, or USD 110.8 billion.

This was followed by debt instruments at 15.9 percent, or USD 42.0 billion, debt securities at 14.1 percent, or USD 37.3 billion, and equity capital at 13.5 percent, or USD 35.6 billion.

Other asset components consisted of currency and deposits at 6.3 percent, or USD 16.7 billion, loans to nonresidents at 4.4 percent, or USD 11.7 billion, equity securities at 2.9 percent, or USD 7.6 billion, and others at 0.9 percent, or about USD 2.3 billion in the infographic and USD 2.4 billion in the detailed table because of rounding.

The BSP said the composition of external financial assets remained broadly stable throughout 2024–2025, with reserve assets consistently accounting for the largest share.

On the liabilities side, other sectors accounted for the majority of the country’s total external financial liabilities at 58.2 percent, amounting to USD 183.3 billion in end-December 2025. Their liabilities rose 1.6 percent from USD 180.4 billion in end-September 2025, led by higher nonresidents’ holdings of debt instruments and equity securities, as well as increased foreign loan availment by the sector.

The general government held 28.1 percent of total external liabilities, but its obligations eased 1.7 percent to USD 88.4 billion from USD 89.9 billion, mainly due to nonresidents’ net disposal of government securities.

Deposit-taking corporations excluding the central bank accounted for 12.5 percent of total liabilities, with external obligations slipping 0.1 percent to USD 39.3 billion from USD 39.4 billion as domestic banks repaid foreign loans.

The BSP held the remaining 1.2 percent of total liabilities, equivalent to about USD 3.9 billion, and these were mostly in the form of Special Drawing Rights. The infographic rounds this item to USD 3.8 billion.

By instrument type, the country’s external liabilities were composed mainly of foreign loans, which accounted for 25.9 percent or USD 81.6 billion, and nonresidents’ investments in debt instruments, which made up 23.9 percent or USD 75.3 billion.

The other liability components were equity capital at 18.8 percent or USD 59.3 billion, debt securities at 15.4 percent or USD 48.6 billion, equity securities at 11.2 percent or USD 35.2 billion, currency and deposits at 1.9 percent or USD 5.9 billion, Special Drawing Rights at 1.2 percent or USD 3.8 billion, trade credits and advances at 1.0 percent or USD 3.3 billion, and others at 0.6 percent or USD 2.0 billion.

The BSP said the composition of external financial liabilities also remained broadly stable over 2024–2025, with loans and debt instruments continuing to make up the bulk of the country’s obligations, while foreign equity investments remained major components.

For policymakers and investors, the narrower net liability position suggests that the Philippines ended 2025 with slightly stronger external balance-sheet support, even as the country remained a net debtor to the rest of the world. The data also point to the continuing role of reserve assets and outward investments in cushioning the economy against external shocks.