Philippines external position improves as net liability narrows in 2025

April 1, 2026 | 12:00am

MANILA, Philippines — The Philippines’ net external liability position narrowed at the end of 2025, as faster growth in foreign assets outpaced the increase in liabilities, according to the Bangko Sentral ng Pilipinas.

Preliminary data released by the BSP showed that the country’s international investment position (IIP) stood at a net liability of $50.8 billion, equivalent to 10.4 percent of gross domestic product, as of end-December 2025. This was an improvement from $52.1 billion or 10.8 percent of GDP at end-September.

“The improvement reflected a faster growth in external assets relative to the increase in external liabilities,” the BSP said.

Outstanding external financial assets rose to $264.1 billion, while liabilities reached $314.9 billion. On a quarter-on-quarter basis, assets inched up by one percent while liabilities grew at a slower 0.4 percent pace, resulting in a 2.5 percent narrowing of the net liability position.

Year-on-year, the country’s net external liability position also declined by 0.7 percent from $51.2 billion in 2024, as asset growth of 5.4 percent outpaced the 4.4 percent increase in liabilities.

The BSP attributed the rise in external assets to gains across major components. Reserve assets increased by 1.6 percent to $110.8 billion, while residents’ outward investments expanded amid sustained cross-border activity and broadly stable interest rate differentials between the Philippines and the United States.

Equity capital investments in foreign affiliates rose by 2.6 percent to $35.6 billion, supported by additional equity infusions and favorable market valuations. Holdings of foreign equity securities also climbed by 4.1 percent to $7.6 billion, while currency and deposit placements abroad grew by 4.5 percent to $16.7 billion.

On the liabilities side, the increase was driven mainly by higher nonresident investments and borrowings. Investments in debt instruments went up by 1.5 percent to $75.3 billion, while outstanding foreign loans rose by 1.3 percent to $81.6 billion due to additional borrowings by the national government and other sectors.

Equity-related liabilities also edged higher, with nonresident holdings of equity securities increasing by 1.5 percent to $35.2 billion and equity capital liabilities rising by 0.8 percent to $59.3 billion, reflecting net inflows and improved market valuations.

By sector, the BSP and banks remained net external creditors, supported by higher reserves and overseas deposit placements. In contrast, the national government and other sectors continued to post net liability positions, reflecting reliance on external financing.

The central bank held the largest share of the country’s external financial assets at 43.5 percent, valued at $114.9 billion, largely in the form of reserve assets.

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