The Philippines’ net external liability position widened in the second quarter of 2023, driven by increased borrowing by non-financial corporations and the government, the Bangko Sentral ng Pilipinas (BSP) said Sunday.
The country’s net external liabilities rose 4.8 percent quarter-on-quarter to P2.4 trillion ($45.2 billion) in the second quarter, from P2.3 trillion ($43.3 billion) in the first quarter, the central bank said.
However, the increase was partly offset by a decrease in the net external liabilities of other financial corporations.
By sector, non-financial corporations remained the largest net debtor, with their net financial liabilities increasing 3.8% to P8.8 trillion ($165.1 billion) in the second quarter.
“This stemmed from the increase in other financial corporations’ holdings of equity and investment fund shares and debt securities issued by non-financial corporations,” the BSP said.
Loans from non-residents and other depository corporations also rose for this sector. Year-on-year, the sector’s net financial liabilities widened due to higher bank loans and greater holdings of its equity and debt securities by other financial corporations.
The general government’s net financial liabilities increased 2.7% in the second quarter to P8.7 trillion ($164.2 billion) as its deposits with other depository corporations decreased and those corporations and other financial corporations increased their holdings of government securities. However, this was countered by higher government deposits with the central bank.
Year-on-year, the government’s net financial liabilities widened due to increased holdings of its securities by non-residents, other financial corporations and other depository corporations, as well as higher loans from non-residents.
Households’ net financial assets grew 1.2 percent in the second quarter to P12.4 trillion ($232.6 billion), supported by their increased holdings of equity and investment fund shares issued by other financial corporations.
Other depository corporations’ net financial assets rose 7.3 percent to P1.9 trillion ($35.7 billion) in the second quarter, driven by a decline in government deposits and an increase in their holdings of government securities. Bank loans to non-financial enterprises also increased.
The central bank’s net financial assets rose 5.9 percent in the second quarter to P836.5 billion ($157.5 billion) as deposits from other depository corporations declined. This was partially offset by an increase in deposits from the general government. Year-on-year, the central bank’s net creditor position strengthened due to a decline in deposits from the national government.
