Philippines posts $740 million deficit in January

THE Philippines booked a balance of payments ( BOP) deficit of $ 740 million in January 2024, the Bangko Sentral ng Pilipinas (BSP) said on Wednesday, Feb. 20.

This was a reversal of the $3.1 billion BOP surplus in the same month last year, the BSP said.

The central bank said this reflected outflows mainly from the national government’s payments of its foreign currency debt obligations.

The final gross international reserves ( GIR) level decreased to $103.3 billion as of the end of January from $ 103.8 billion in December 2023, the BSP said.

Nonetheless, the central bank said the latest GIR level represented “a more than adequate external liquidity buffer” equivalent to 7.7 months’ worth of imports of goods and payments of services and primary income.

It is also about six times the country’s short- term external debt based on original maturity and 3.9 times based on residual maturity, the bank added.

Riz al Commercial Banking Corporation chief economist Michael Ricafort said the deficit last month was partly due to continued trade deficit as seen in recent months, as well as some payment of foreign debt upon crossing the new year.

“For the coming months, the BOP data could improve, thereby could also lead to better gross international reserves ( GIR) data, due to the following factors: proceeds of the national government’ s foreign currency- denominated borrowings f rom both commercial sources, as well as from official development assistance and other multilateral sources,” he said.