BoP again in deficit

Latest BoP figure proved to be better than the $1.35 billion deficit in January 2020

The country’s balance of payments or BoP started the year with a deficit, recording a notably lower figure in January over end-December 2020’s.

Latest data from the Bangko Sentral ng Pilipinas (BSP) show BoP in January 2021 at a deficit of $752 million versus the posted $4.23 billion surplus month-ago.

However, the latest BoP figure proved to be better than the $1.35 billion deficit in January 2020.

“The BoP deficit in January 2021 reflected outflows mainly from the foreign currency withdrawals of the National Government (NG) from its deposits in the BSP to pay its foreign currency debt obligations,” the BSP said.

“These outflows were partly offset, however, by the inflows from the BSP’s foreign exchange operations and income from its investments abroad,” it added.

GIR at $108.67B

According to the central bank, the recent BoP deficit reflected the decline in the final gross international reserves or GIR level, which stood at $108.67 billion as of end-January 2021 compared to the $110.12 billion last month.

Still, the BSP recognized the current GIR levels as more than adequate to shield the local economy against external shocks.

“This buffer is equivalent to 11.6 months’ worth of imports of goods and payments of services and primary income,” it said.

“Moreover, it is also about 9.4 times the country’s short-term external debt based on original maturity and five times based on residual maturity,” it added.