Regulators on Monday reported that the country’s international investment position (IIP) got better, showing an
improvement in net liability position to only $19.5 billion at end-2011
or 25.8 percent lower than at end-2010 when this totaled $26.3 billion.
This
means the Philippines continues to draw far more foreign
currency-denominated obligations than it was creating assets, an event
not normally taken as positive were it not for the fact that those
obligations were incurred for investment purposes.
From a larger
perspective, therefore, the net liability position of the country’s IIP
is a metaphorical gift the economy could open up later and enjoy its
treats several years down the line.
“This
emerged as the growth in the country’s total external financial assets
nearly tripled that of total external financial liabilities. Total
external financial assets or claims of residents on the rest of the
world increased markedly by 14.2 percent to $110 billion at end-2011,
from its year-ago level of $96.3 billion.
“Likewise,
total external financial liabilities increased by 5.6 percent to reach
$129.5 billion relative to $122.6 billion as of end-2010,” the BSP said.
The improving IIP was noted against a background of weak global economic conditions and heightening
financial strains whipped up by the sovereign debt and financial crisis in much of the countries of Europe.
financial strains whipped up by the sovereign debt and financial crisis in much of the countries of Europe.
Despite
the resulting market volatility and waning appetite for risk by market
participants, however, capital flows into the country remained robust,
the BSP said.
The
central bank acknowledged having a higher net external position while
during the period, while the various banks, the national government and
other sectors posted lower net positions during the period.
The
BSP said its net external asset position improved considerably by 21.1
percent to $73.9 billion at end-2011 versus $61 billion at end-2010.
The
$10.2 billion surplus in the balance of payments enabled the BSP to
build its foreign currency reserves and helped shield the country from
external headwinds.
The
BSP also said the national government remained a net user of foreign
assets and posted a higher net liability position of $42.7 billion from
$39 billion the previous year.
Its
bond sales of $2.8 billion, net issuance of local currency denominated
securities of another $2 billion as well of foreign-loan drawdowns
contributed to the general increase.
Similarly,
the other sectors posted net liability position of $48 billion which
was lower than the year ago level of $50.2 billion, the BSP said.
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