THE country’s balance of payments (BOP) hit a $2.3-billion deficit in November, the widest in over two years, from the shortfalls of $216 million and $724 million, respectively, recorded a year and a month earlier.
The Bangko Sentral ng Pilipinas (BSP) attributed the deficit to the “national government’s (NG) net foreign currency withdrawals from its deposits with the BSP to settle its foreign currency debt obligations and pay for its various expenditures, and the BSP’s net foreign exchange operations.”
Year to date, however, the country’s BOP position remained in surplus at $2.1 billion, lower than the $3.0 billion recorded in January-November 2023.
This was mainly due to “lower net receipts from trade in services and net foreign borrowings by the NG,” the central bank said.
“However, this decline was partly muted by the continued net inflows from personal remittances as well as net foreign portfolio and direct investments,” it added.
The country’s gross international reserves (GIR), meanwhile, dropped to $108.5 billion as of end-November from $111.1 billion a month earlier, the central bank also reported.
The level was said to represent “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 4.3 times the country’s short-term external debt based on residual maturity,” the BSP added.
The central expects the country to post a BOP surplus this year and the next. It raised the projections for 2024 and 2025 in September, citing positive outlooks for economic growth, inflation and world trade.
“The latest set of forecasts indicate an improvement in the overall balance of payments position for 2024 and 2025 relative to the June 2024 projection exercise,” it said.
“This development is underpinned mainly by the sustained positive global and domestic economic growth prospects, decelerating inflation, as well as the pickup in world trade activity.”
The 2024 BOP surplus projection was raised to $2.3 billion from $1.6 billion, while that for 2025 edged up to $1.7 billion from $1.5 billion.
The BOP is a summary of a country’s transactions with the rest of the world for a specific period. It consists of the current account, which covers trade in goods, services, and primary and secondary income (which includes overseas Filipino worker remittances); the capital account — capital transfers and nonfinancial assets — and the financial account, which consists of investments from abroad.
The country recorded a BOP surplus of $3.7 billion last year.
As for GIR, the BSP also raised its forecasts for this year to $106 billion from $104 billion. That for 2025 was also hiked to $107 billion from $105 billion.
The revised BOP forecasts, the BSP said last month, come with limitations given a continued buildup in external challenges.
“The BSP will continue to monitor closely emerging external sector developments and risks, and how these may impact the BSP’s fulfillment of its price and financial stability objectives,” it added.
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