Phillipinnes net external liability position narrows to $58 billion

January 1, 2026 | 12:00am

Less debt, more foreign assets

MANILA, Philippines —  The country’s net international investment position improved in the third quarter, with the Philippines posting a narrower net external liability position on the back of higher external assets and lower foreign obligations.

Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed that the country’s net liability position stood at $58.2 billion as of end-September, equivalent to 12.1 percent of gross domestic product, declining from $67 billion or 14.1 percent of GDP as of end-June.

“The lower net liability position reflects the expansion of external assets and decline in foreign obligations,” the central bank said.

Outstanding external assets rose by 1.9 percent to $263.9 billion by end-September from $259 billion a quarter earlier, while external liabilities inched down by 1.2 percent to $322.1 billion from $326 billion.

The quarter-on-quarter increase in external assets was driven mainly by a 2.9-percent rise in reserve assets to $109.1 billion from $106 billion. The BSP said residents’ investments in foreign-issued debt securities also climbed by 4.8 percent to $38.9 billion, while equity capital placements in foreign affiliates increased by 3.7 percent to $36.7 billion.

On the liabilities side, the BSP noted a 9.5-percent decline in nonresident holdings of equity securities to $34.7 billion and a 4.4-percent drop in equity capital investments to $59.3 billion.

These developments “mirrored the subdued performance of the Philippine Stock Exchange Index,” which fell to 5,953.46 at end-September from 6,364.94 at end-June, the BSP said. Valuation adjustments from the appreciation of the dollar also contributed to the decline in liabilities, the central bank added.

Year on year, the country’s net external liability position contracted by 7.1 percent from $62.7 billion as of end-September 2024. This came as total external assets grew by 3.3 percent to $263.9 billion, outpacing the 1.2 percent increase in external liabilities to $322.1 billion.

External assets expanded due to a 17.6-percent increase in residents’ investments in foreign-issued debt securities, a 13.2-percent rise in equity capital placements in foreign affiliates and a 23.9-percent growth in holdings of external equity securities.

Loans extended by resident banks to nonresidents also went up by 8.7 percent to $11.9 billion.

Meanwhile, the modest year-on-year increase in liabilities was attributed mainly to a 13-percent rise in nonresident holdings of debt securities to $59.4 billion, a 9.8-percent uptick in net investments in debt instruments to $73.5 billion and a four-percent increase to $80.5 billion in foreign loans availed of by residents.

By institutional sector, the BSP remained the country’s largest net lender to the rest of the world, holding 43 percent of total external financial assets valued at $113.6 billion.

The central bank said this reflected higher reserve assets, supported by valuation gains on gold holdings and foreign currency-denominated reserves as well as net income from overseas investments.

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