The Philippines’ net external liability position widened sharply to $65.552 billion at the end of June, reflecting increased foreign borrowing by the national government, domestic banks, and other sectors, according to preliminary central bank data.
The amount represented 13.4% of the country’s gross domestic product, up substantially from the $55.011-billion net external liability recorded at the end of March, when the position was equivalent to 11.2% of GDP. The second-quarter figure marked a 19.16% increase from the previous quarter.
The International Investment Position, or IIP, measures the difference between the financial assets Philippine residents hold abroad and the financial liabilities owed to foreign investors and creditors. A net liability means the country’s external obligations are larger than its external financial assets.
The central bank attributed the wider gap during the second quarter mainly to new borrowings by the national government, domestic banks and other sectors of the economy. Despite the increase, it noted that the maturities of external liabilities remained predominantly long term, helping limit immediate refinancing pressures.
The country’s total external financial liabilities increased 3.1% from the first quarter to $324.9 billion at the end of June. The amount was also 1.5% higher than the $320 billion recorded a year earlier and was equivalent to 66.3% of GDP.
The general government accounted for $92.2 billion, or 28.4%, of total external liabilities. Deposit-taking corporations excluding the central bank accounted for another $39.6 billion, while the Bangko Sentral ng Pilipinas represented $3.9 billion. Other sectors, including corporations and households, accounted for the largest portion at $189.1 billion.
Loans were the biggest component of external liabilities, amounting to $88.6 billion or 27.3% of the total. Other major components included debt and equity investments, debt securities, currency and deposits, and special drawing rights.
At the same time, Philippine residents’ external financial assets remained broadly stable. These assets stood at $259.3 billion at the end of June, slightly below the $259.9 billion recorded three months earlier but 1.3% higher than the $256.1 billion posted a year earlier. The total was equivalent to 52.9% of GDP.
The central bank’s reserve assets continued to provide an important external buffer. Reserve assets stood at $104.745 billion during the second quarter, accounting for about 40.4% of the country’s total external financial assets. However, this was down from $106.636 billion at the end of March and $105.998 billion a year earlier.
The central bank also reported changes in the composition of Philippine external assets. While reserve assets remained the largest component, residents increasingly diversified their foreign holdings toward equity investments, alongside other forms of overseas financial assets.
By sector, the national government remained a net debtor with $92.2 billion in external liabilities. Banks also became net debtors, with liabilities exceeding their external assets by about $1.4 billion. Other sectors, including other financial corporations, nonfinancial corporations, households and nonprofit institutions, recorded a combined net debtor position of $76.6 billion.
The central bank, in contrast, remained a net lender. Its external assets amounted to about $104.7 billion, reflecting the role of international reserves and other foreign assets in supporting the country’s external financial position.
The latest increase follows a period of movement in the Philippines’ external position. At the end of 2025, the country’s net external liability stood at $50.829 billion, equivalent to 10.4% of GDP, before widening to $54.9 billion at the end of March 2026.
The second-quarter increase therefore reflects both greater external obligations and relatively stable foreign assets. The predominance of long-term liabilities provides some protection against immediate refinancing pressure, although continued increases in external borrowing remain an important indicator for monitoring the country’s exposure to global financial conditions.
