The Philippines remained in a net external liability position at the end of March 2026, with its international investment position deficit widening to $54.9 billion from $50.8 billion at the end of 2025, according to the Bangko Sentral ng Pilipinas.
The BSP said the wider deficit was driven mainly by a decline in the country’s external financial assets, particularly reserve assets.
Reserve assets fell as a result of the BSP’s foreign exchange operations and the national government’s drawdowns on its foreign currency deposits with the BSP for debt servicing.
The BSP also cited downward valuation adjustments in external assets, including foreign-issued debt securities, as higher bond yields reflected market concerns over geopolitical uncertainties and a weaker global outlook.
Despite the pressure on external assets, the BSP said the country’s external position remained supported by continued foreign investment inflows and access to external financing.
The central bank remained the largest holder of the country’s external financial assets, although its holdings declined by 3.8 percent to $110.4 billion at the end of March.
External assets were pulled down mainly by a 3.8-percent drop in reserve assets to $106.6 billion. The BSP said gains from higher global gold prices helped partly offset the decline, but were not enough to reverse the overall downward movement.
Deposit-taking corporations also recorded a contraction in external financial assets, down 3.3 percent to $4 billion at the end of the first quarter.
Residents’ investments in foreign-issued debt instruments likewise declined by 1.7 percent to $41.3 billion, reflecting both transaction and valuation effects.
The contraction was driven mainly by net outflows linked to the settlement of intercompany obligations. The BSP said the decline in claims of Philippine companies on their foreign affiliates was related to the settlement of trade-related receivables of export-oriented industries, particularly semiconductors.
Exchange rate movements also contributed to the lower value of these external assets.