The Philippines’ net external liability grew by 5.4 percent from P3.5 trillion in the fourth quarter of 2024 to P3.7 trillion in the first quarter of 2025 preliminary data under the Balance Sheet Approach (BSA) show.

The increase in the domestic economy’s net liabilities to the rest of the world was driven by non-residents’ higher holdings of government-issued securities and growth in loans extended by non-residents to the government.

Foreign borrowings of other depository corporations also rose, indicating greater reliance on external financing.

The general government’s net debtor position expanded, reflecting increased government security holdings by other financial and depository corporations. Government securities continued to constitute three-fourths of the general government’s obligations.

Notably, more than two-thirds of the general government’s obligations were denominated in domestic currency, which partly insulated the sector from exchange rate volatility.

Meanwhile, households recorded a slight increase in their net creditor position, supported by the sector’s increased investments in equity and investment fund shares issued by other financial corporations.

However, the decreases in their bank deposits and currency holdings, alongside the increase in their bank loans, moderated the improvement in the sector’s net financial position. Nevertheless, households remained highly solvent, with their gross financial assets amounting to nearly three times their obligations.

The Balance Sheet Approach presents a comprehensive overview of the Philippine economy’s financial position. The BSA is released one quarter later than the International Investment Position (IIP), since the IIP is a key data source for the BSA, along with other sources for sectoral balance sheet data. Bangko Sentral ng Pilipinas