Department of Economic Statistics E n d – S e p t e m b e r 2 0 1 7 The country’s IIP registers an increase in net liability position. The country’s preliminary net international investment position (IIP) registered a net external liability position of US$35.2 billion as of end-September 2017, an increase of US$1.7 billion (5.1 percent) from the US$33.5 billion net external liability position as of end-June 2017. The higher negative balance was reflective of the US$3.5 billion (1.8 percent) increase in total external financial liabilities for the period which outpaced the US$1.8 billion (1.1 percent) growth in total external financial assets. As of end-September 2017, total outstanding external financial liabilities reached US$201.8 billion, while total outstanding external financial assets amounted to US$166.6 billion (Figure 1). The stock of external financial liabilities during the quarter grew mainly on account of the US$2.8 billion (4 percent) increase in foreign direct investments (FDI) and the US$1.2 billion (1.5 percent) growth in foreign portfolio investments (FPI). The build-up was reflective of the significant investment inflows and positive price revaluation of non-residents’ holdings of local equity capital and equity securities on the back of the country’s sustained positive economic performance and growth prospects even as the peso depreciated against the US dollar during the period. 1 Meanwhile, the improvement in external financial assets during the quarter was due to the accumulation of portfolio (6 percent growth), direct (1.9 percent growth), and other investments (1.6 percent growth) abroad by residents despite the drop in the country’s reserve assets. On a year-on-year basis, the country’s net external liability position as of end-September 2017 was higher by 23.8 percent than the US$28.4 billion 1 The peso depreciated against the US dollar by 1.2 percent from P50.466/US$1 as of end-June 2017 to P51.073/US$1 as of end-September 2017. Peso depreciation implies that peso-denominated liabilities result in lower US dollar equivalent. (50,000) 0 50,000 100,000 150,000 200,000 250,000 Assets Liabilities IIP end-June 2017 164,789 198,303 (33,514) end-September 2017 166,575 201,782 (35,207) Figure 1 International Investment Position (in million US dollars) INTERNATIONAL INVESTMENT POSITION OF THE PHILIPPINES
Transcript
Department of Economic Statistics
E n d – S e p t e m b e r 2 0 1 7
The country’s
IIP registers an increase in
net liability position.
The country’s preliminary net international investment position (IIP) registered a net external liability position of US$35.2 billion as of end-September 2017, an increase of US$1.7 billion (5.1 percent) from the US$33.5 billion net external liability position as of end-June 2017. The higher negative balance was reflective of the US$3.5 billion (1.8 percent) increase in total external financial liabilities for the period which outpaced the US$1.8 billion (1.1 percent) growth in total external financial assets. As of end-September 2017, total outstanding external financial liabilities reached US$201.8 billion, while total outstanding external financial assets amounted to US$166.6 billion (Figure 1).
The stock of external financial liabilities during the quarter grew mainly on account of the US$2.8 billion (4 percent) increase in foreign direct investments (FDI) and the US$1.2 billion (1.5 percent) growth in foreign portfolio investments (FPI). The build-up was reflective of the significant investment inflows and positive price revaluation of non-residents’ holdings of local equity capital and equity securities on the back of the country’s sustained positive economic performance and growth prospects even as the peso depreciated against the US dollar during the period.1 Meanwhile, the improvement in external financial assets during the quarter was due to the accumulation of portfolio (6 percent growth), direct (1.9 percent growth), and other investments (1.6 percent growth) abroad by residents despite the drop in the country’s reserve assets. On a year-on-year basis, the country’s net external liability position as of end-September 2017 was higher by 23.8 percent than the US$28.4 billion
1 The peso depreciated against the US dollar by 1.2 percent from P50.466/US$1 as of end-June 2017 to P51.073/US$1 as of
end-September 2017. Peso depreciation implies that peso-denominated liabilities result in lower US dollar equivalent.
(50,000)0
50,000100,000150,000200,000250,000
Assets Liabilities IIP
end-June 2017 164,789 198,303 (33,514)
end-September 2017 166,575 201,782 (35,207)
Figure 1 International Investment Position
(in million US dollars)
INTERNATIONAL INVESTMENT POSITION OF THE PHILIPPINES
End-June 2017 International Investment Position
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posted a year ago. The higher net external liability position was brought about by the US$7.9 billion (4.1 percent) expansion in the external financial liabilities which broadly outpaced the US$1.1 billion (0.7 percent) increase in external financial assets. The expansion in liabilities reflected the higher outstanding debt instruments held by non-resident affiliates (FDI) and increased holdings by non-residents of equity securities issued by residents (FPI). Meanwhile, the growth in external assets emanated from residents’ other investments, particularly loans extended by local banks to non-residents, direct investments in the form of equity capital, and portfolio investments abroad.
The BSP maintains a
net asset position,
while Banks, the General
Government and Other
Sectors remain net
users of foreign
resources.
The Bangko Sentral ng Pilipinas (BSP) registered a net external asset position as of end-September 2017 albeit lower than the level posted a quarter ago. In contrast, the other major sectors – Deposit-taking Corporations (Banks, except the Central Bank), General Government, and Other Sectors – remained net users (borrowers) of foreign resources. Nonetheless, the net external position of Banks and the General Government continued to improve (Figure 2).
As of end-September 2017, banks’ net external liability position dropped to US$6.8 billion from US$8.1 billion last quarter due to the US$849 million increase in assets coupled with the US$453 million decrease in liabilities. The increase was due to the growth in residents’ investments in debt securities issued by non-residents alongside the increase in outstanding currency and deposits held by residents. The net external liability position of the General Government declined by US$454 million to reach US$34.3 billion as of end-September 2017 from US$34.7 billion as of end-June 2017. This was on account of the US$644 million decline in outstanding National Government (NG)-issued debt securities held by non-residents, which more than offset the US$190 million increase in NG loans extended by non-residents.
Figure 2 International Investment Position by Sector
(in million US dollars)
End-June 2017 International Investment Position
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Meanwhile, Other Sector’s net external liability position was higher at US$73.9 billion as of end-September 2017 than the US$70.8 billion as of end-June 2017. This developed as external financial liabilities increased by US$4.4 billion, outperforming the US$1.3 billion growth in external financial assets. The growth in external financial liabilities was on account of higher holdings by non-residents of foreign direct and portfolio investments.
External Financial Assets
The BSP
continues to hold the
highest stock of external
financial assets.
Almost half (48.6 percent) of the country’s total external financial claims, totaling US$81 billion, were held by the BSP (Figure 3). The BSP’s gross international reserves (GIR), which comprised the bulk of its external financial assets, declined by 0.4 percent during the quarter to post US$81 billion as of end-September 2017.
The Other Sectors’ total external financial assets amounted to US$59.3 billion, more than a third (35.6 percent) of the country’s total external financial assets. This amount translates to a 2.2 percent increase from the US$58.0 billion recorded as of end-June 2017. These assets were mostly in the form of resident corporations’ investments in equity capital and debt instruments issued by non-residents or direct investments abroad. Banks accounted for the remaining 15.7 percent of the country’s external financial assets at US$26.2 billion, higher than the US$25.4 billion recorded a quarter ago. The growth in banks’ total external financial assets was brought about by the 5.4 percent increase in residents’ investments in debt securities issued by non-residents compared to the previous quarter, and the 8.8 percent expansion in outstanding currency and deposits held by residents.
Almost half of
residents’ By type of instrument, about half (or US$81 billion) of residents’ total external financial assets were reserve assets held by the BSP. Direct
BSP, US$81.0B, 48.6%
Banks, US$26.2B, 15.7%
Other Sectors, US$59.3B, 35.6%
Figure 3 External Financial Assets by Sector
end-September 2017 (Share to Total in Percent)
End-June 2017 International Investment Position
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financial assets are
reserve assets held by the
BSP.
investments in the form of debt instruments (or intercompany lending) and equity capital placements in foreign affiliates accounted for 15.1 percent and 12.5 percent of total external financial assets, respectively (Figure 4).
External Financial Liabilities
The Other
Sectors account for
most of residents’
total liabilities to non-
residents.
Total external financial liabilities of the Other Sectors comprised almost two-thirds of the country’s total external liabilities at US$133.2 billion as of end-September 2017 (Figure 5). These were mostly non-residents’ placements in equity capital and debt instruments issued by local affiliates, equity securities issued by local corporations, and loans extended by non-resident creditors.
The General Government’s external liabilities as of end-September 2017 reached US$34.3 billion, accounting for 17 percent of the country’s total external financial liabilities. The sector’s external liabilities were in the form of debt securities held by non-residents (50.1 percent) and loans extended by non-resident creditors (49.9 percent). Banks’ total external liabilities reached US$33 billion comprising 16.3 percent of the country’s total external liabilities. Banks’ external
Figure 4 External Financial Assets by Type of Instrument
end-September 2017 (Share to Total in Percent)
BSP, US$1.3B, 0.7%
Banks, US$33.0B, 16.3%
General Government,
US$34.3B, 17.0%
Other Sectors, US$133.2B, 66.0%
Figure 5 External Financial Liabilities by Sector
end-September 2017 (Share to Total in Percent)
End-June 2017 International Investment Position
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liabilities comprised mostly of loans extended by non-residents (37 percent) and non-residents’ holdings of equity securities (36.5 percent).
Financial liabilities are mostly in the
form of foreign equity
securities, equity capital,
and loans.
The country’s total external financial liabilities to the rest of the world consisted mostly of non-residents’ holdings of equity securities issued by local corporations (27.3 percent), non-residents’ placements of equity capital in resident affiliates (23.2 percent), and foreign loans extended by non-resident creditors (20.3 percent) (Figure 6).
Loans, US$40.9B, 20.3%
Equity Securities, US$55.1B, 27.3%
Equity Capital, US$46.9B, 23.2%
Debt Securities, US$24.9B, 12.3%
Debt Instruments, US$26.0B, 12.9%
Trade Credits and Advances,
US$2.9B, 1.4% Currency and
Deposits, US$2.8B, 1.4%
Special drawing rights, US$1.2B,
0.6%
Other Accounts Payable, US$1.0B,
0.5%
Financial Derivatives,
US$0.2B, 0.1%
Figure 6 External Financial Liabilities by Type of Instrument
Note: Details may not add up to totals due to rounding.r Revisedp Preliminary-- Infinite growth rate
Jun -17 r
Table 1. International Investment Position by Sector
as of periods indicated
(in million US dollars)
Sep -16 p Sep -17 p
Sep -16 p Jun -17 r Sep -17 p Sep -16 p Jun -17 r Sep -17 p Sep -16 p Jun -17 r Sep -17 p Sep -16 p Jun -17 r Sep -17 p Sep -16 p Jun -17 r Sep -17 p Sep -16 p Jun -17 r Sep -17 p
Note: Details may not add up to totals due to rounding.r Revisedp Preliminary- Rounds off to zero-- Infinite growth rate
Total % to Total
Table 2. External Financial Assets
as of periods indicated
(in million US dollars)
Instrument/SectorCentral Bank (CB) corporations, except CB
Deposit-taking
General Government Other Sectors
Sep -16 p Jun -17 r Sep -17 p Sep -16 p Jun -17 r Sep -17 p Sep -16 p Jun -17 r Sep -17 p Sep -16 p Jun -17 r Sep -17 p Sep -16 p Jun -17 r Sep -17 p Sep -16 p Jun -17 r Sep -17 p
