PHL net external liabilities ease

INCREASED INVESTMENTS in foreign debt instruments by the Bangko Sentral ng Pilipinas (BSP) and other banks caused the country’s net external liabilities to ease by 9.3% in the third quarter of 2025.

The country’s net external liabilities fell to P3.307 trillion at end-September from P3.646 trillion in the second quarter last year, based on data from the BSP’s balance sheet approach (BSA).

Year on year, it dropped by 2.9% from P3.406 trillion.

“This was driven by higher investments of the Bangko Sentral ng Pilipinas and other depository corporations in foreign debt instruments, partly offset by increased government securities and loans owed by the general government to nonresidents,” the central bank said in a statement released late in Tuesday.

The BSA contains a comprehensive overview of the Philippine economy’s financial position with the rest of the world. It is published one quarter later than the International Investment Position, which serves as a key data source for the BSA and other sources for sectoral balance sheet data.

In the third quarter, nonfinancial corporations (NFCs) and the general government remained net debtors, while households, the central bank, the other depository corporations (ODCs), and other financial corporations (OFCs) were net creditors.

“The central bank and other depository corporations posted stronger overall net creditor positions, reflecting changes in their domestic and external financial assets and liabilities,” the BSP said.

NFCs’ net debtor position went up by 2.4% to P12.08 trillion from the P11.801 trillion in liabilities in the second quarter and by 2% from P11.838 trillion the previous year.

Most of the sector’s financing came from loans as well as equity and investment fund shares, which were mainly extended by the rest of the world and ODCs.

Meanwhile, the net external liabilities of the general government, including those of the National Government, its extra-budgetary units, local government units and social security funds, increased by 3.8% to P10.832 trillion at end-September from P10.433 trillion at end-June.

Year on year, this rose by 18.6% from P9.135 trillion.

“(T)he general government’s net debtor position expanded due to higher holdings of government securities by nonresidents and other financial corporations, increased loan obligations to nonresidents, and lower deposits with the central bank,” the BSP said. “Government securities remained the sector’s main funding instrument.”

Of its total obligations, 68.9% were local currency denominated, which the central bank said made it less vulnerable to exchange rate fluctuations.

Meanwhile, higher holdings of foreign-issued debt securities and lower deposit liabilities to the general government also boosted the BSP’s net credit position to P1.846 trillion as of September, jumping by 23.1% from the P1.499 trillion a quarter prior and by 40.9% from P1.31 trillion in the same period the previous year.

ODCs’ net creditor position widened by 0.7% to P1.373 trillion as of end-September from P1.363 trillion in the second quarter but narrowed by 0.3% year on year from P1.377 trillion.

OFCs’ net creditor position also went up by 43.2% to P525.4 billion in the third quarter from P366.8 billion in the April-June period but was 4.1% lower than the P548.1 billion the prior year.

On the other hand, households’ net financial asset position improved by 3.3% quarter on quarter to P15.861 trillion from P15.358 trillion. It also rose by 10.7% year on year from P14.332 trillion.

“The (households) continued to be highly solvent in Q3 2025, with gross financial assets remaining at nearly three times their gross financial obligations,” the BSP said. — Katherine K. Chan