The Philippines’ net external liabilities grew by 7.1 percent from P3.5 trillion in Q1 2025 to P3.7 trillion in Q2 2025, preliminary Balance Sheet Approach (BSA) data show.
The domestic economy’s increased net liabilities to the rest of the world were driven by the rise in non-financial corporations’ external financing in the form of equity and investment fund shares, as well as growth in loans owed by the general government to the rest of the world. Moreover, the central bank’s investments in debt securities issued by nonresidents declined.
The non-financial corporations’ net debtor position rose due to higher equity security liabilities to nonresidents and other financial corporations.[4] Loans remained the sector’s primary funding instrument, followed by equity securities. The rest of the world and other depository corporations remained the sector’s major sources of financing, together constituting nearly three-fourths of the sector’s total outstanding liabilities.
The general government’s net debtor position also widened. This reflected an increase in government securities held by other depository corporations, non-residents, and other financial corporations. Likewise, loans owed by the government to nonresidents grew. Government securities remained the sector’s main funding instrument.
Notably, 70.1 percent of the general government’s obligations continued to be denominated in domestic currency. This partly insulated the sector from exchange-rate fluctuations.
The BSA, a financial stability surveillance tool developed by the International Monetary Fund in 2002, is used to better monitor the potential vulnerabilities of economic sectors and their interrelationships. Unlike the more traditional analysis of an economy that looks at flows occurring over a period of time, the BSA looks at the outstanding value of financial assets and liabilities as of a given. PR