The Philippines posted a balance of payment (BOP) surplus of $1.44 billion in the first half of 2024, despite the deficit incurred in June, the Bangko Sentral ng Pilipinas said Friday.
Data from the BSP show that the June deficit was lower than the $606-million BOP gap recorded in the same month last year. In May, the country achieved a $2-billion surplus, the biggest this year.
BOP refers to the amount of money coming in and out of the country and reflects the country’s external strength. It affects the foreign exchange rate as well as the gross international reserves.
“The BOP deficit in June 2024 reflected outflows arising mainly from the national government’s payments of its foreign currency debt obligations,” the BSP said in a statement.
It said that despite deficit in June, the cumulative BOP position registered a surplus of $1.4 billion from January to June, lower than the $2.3-billion surplus recorded in the same period last year.
“Based on preliminary data, this cumulative BOP surplus reflected mainly the narrowing trade in goods deficit alongside the continued net inflows from personal remittances, trade in services, net foreign direct investments, net foreign borrowings by the NG and net foreign portfolio investments,” the BSP said.
The BSP said the trade deficit from January to May reached $20.6 billion, down from the $23.7-billion deficit posted in the same period last year.
The BOP surplus position enabled the BSP to accumulated more foreign reserves as a buffer against external volatilities.
The BSP said the gross international reserves (GIR) climbed to $105.2 billion as of end-June 2024 from $105.0 billion as of end-May. The level also went up from $99.4 billion as of end-June 2023.
“The latest GIR level represents a more than adequate external liquidity buffer equivalent to 7.7 months’ worth of imports of goods and payments of services and primary income,” the BSP said.
It was also about 6.0 times the country’s short-term external debt based on original maturity and 3.8 times based on residual maturity.
The GIR aims to ensure the availability of foreign exchange to meet balance of payments financing needs such as for payment of imports and debt service, in extreme conditions when there are no export earnings or foreign loans.
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