PH posts $196-M deficit in February

Bangko Sentral ng Pilipinas (BSP) (Photo By patrickroque01/Wikimedia Commons, CC BY-SA 4.0)

MANILA – The country’s overall balance of payments (BOP) position posted a deficit of USD196 million in February.

In a report released late Tuesday, the Bangko Sentral ng Pilipinas (BSP) said the deficit last month was lower than the USD895 million deficit recorded in February last year.

“The BOP deficit in February 2024 reflected outflows arising mainly from the national government’s (NG) payments of its foreign currency debt obligations,” the central bank said.

The BOP is a summary of the economic transactions of a country with the rest of the world for a specific period.

The overall position can be in surplus, deficit, or balance.

For the first two months of the year, the BOP level was at USD936 million deficit, a reversal from the USD2.2 billion surplus recorded in the same period last year.

“Based on preliminary data, this cumulative BOP deficit reflected mainly the continued trade in goods deficit coupled with the NG’s net repayments of its foreign loans,” the BSP said.

The BOP position reflects a decrease in the final gross international reserves (GIR) level to USD102 billion as of end-February 2024 from USD103.3 billion as of end-January 2024.

The BSP, however, said the latest GIR level represents a more-than-adequate external liquidity buffer equivalent to 7.5 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 3.6 times based on residual maturity.

“The latest BOP and GIR data could have also been supported by the continued growth in the country’s structural US dollar inflows, such as OFW remittances, BPO revenues, exports, foreign investments, foreign tourism revenues, POGO revenues, among others,” Rizal Commercial Banking Corp. chief economist Michael Ricafort said in a comment.

Ricafort said in the coming months, the BOP data could improve, which could also lead to better GIR data.

He said this would be partly due to the proceeds of the national government’s foreign currency-denominated borrowings from both commercial sources, as well as from official development assistance and other multilateral sources.

Ricafort said the continued growth in overseas Filipino remittances, net foreign direct investments, and narrowing trade deficit could also help improve the BOP position.