Philippines net external liability widens to $54.9 billion

MANILA, Philippines — The Philippines’ net liability to the rest of the world widened in the first quarter, as the country’s external assets fell faster than its liabilities amid lower reserve assets, foreign exchange operations and weaker global market conditions.

Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed the country’s international investment position (IIP) stood at a net external liability of $54.9 billion as of end-March, equivalent to 11.2 percent of gross domestic product.

This was wider than the $50.8-billion net liability recorded as of end-December 2025, but still narrower than the $56-billion gap posted a year earlier.

The IIP measures the value of financial assets that Philippine residents hold abroad and the liabilities they owe to nonresidents.

The BSP said it provides “a snapshot of what the country owns abroad and owes to the rest of the world,” making it a key indicator of external vulnerability and financial stability.

According to the central bank, the latest position was “mainly driven by a faster decline in external financial assets relative to liabilities.”

Total external financial assets slipped by 2.1 percent to $258.6 billion as of end-March from $264.1 billion at end-2025, although these were still 1.6 percent higher than the $254.7 billion recorded a year earlier.

Meanwhile, total external financial liabilities eased by 0.4 percent to $313.5 billion from $314.9 billion at end-December. Year-on-year, liabilities inched up by 0.9 percent from $310.7 billion.

“The decline in assets was primarily due to lower reserve assets, largely attributable to BSP foreign exchange operations and national government’s drawdowns on its foreign currency deposits with the BSP for debt servicing,” the central bank said.

It also said higher bond yields, driven by market concerns over geopolitical uncertainties and a weak global outlook, led to downward valuation adjustments in external assets, including foreign-issued debt securities.

By sector, the BSP remained the country’s biggest net external creditor, with a net position of $106.6 billion as of end-March. Banks also had a net creditor position of $3.8 billion.

These were offset by the national government’s net debtor position of $89.3 billion and other sectors’ net external liability of $76 billion. Other sectors include other financial corporations, non-financial corporations, households and nonprofit institutions serving households.

Despite the wider first-quarter net liability position, the BSP said the country’s external position “remains supported by continued foreign investment inflows and access to external financing.”