The country’s creditworthiness as measured by its net external liability position deteriorated some more in the quarter ending September 2023 to USD50 billion from USD49.6 billion three months earlier, the Bangko Sentral ng Pilipinas (BSP) said.
The widening metric represents a deterioration 62.1 percent worse than a year earlier when the net liability stood at only USD30.8 billion and increases the risks for the economy to access overseas funds with relative ease to help temper the imbalance. The net liability positioneffectively makes the Philippines a net debtor rather than a net creditor country.
This means that in the event of a global economic crisis, the Philippines may not be able to tap foreign funds, or tap the same only by paying a steep price for the borrowed resources, which is why the BSP keeps a close tab on this important metric.
Of the four sectors comprising the metric, only the BSP posted a net asset position totaling USD98.7 billion, making the central bank a net creditor entity than net yh debtor.
,The country’s banks have proven to be net debtors during the period with a net liability of USD1.6 billion and the national government also proved a net debtor with net liability of USD70.4 billion. The other sectors making up the metric were net debtors with net liability of USD76.6 billion.
According to the BSP, the country’s financial assets comprise of so-called reserves assets making up 43 percent of total assets equal to USD98.1 billion, 12.5 percent in the form of equity capital worth USD28.5 billion, 12.4 percent or USD28.3 billion in debt securities holdings, 6.2 percent in the form of currency and deposits of USD14.28 billion, 4.8 percent in loans totaling $11 billion, 1.9 percent in equity securities worth USD4.2 billion and 1.3 percent others worth USD2.6 billion.
The country’s financial liabilities were dominated by foreign loans worth USD67.2 billion or 24.2 percent, debt instruments totaling USD60.3 billion or 21.7 percent, equity capital of USD57.2 billion or 20.6 percent, debt securities of another USD45.3 billion or 16.3 percent, equity securities of USD35.4 billion or 12.7 percent, trade credits and advances of USD4.1 billion or 1.5 percent, USD3.7 billion worth of special drawing rights (SDR) accounting for 1.3 percent of financial liabilities and other liabilities equal to 1.7 percent or USD4.8 billion.
