BOP still in surplus of $2.18 billion – BSP

The Philippines’ balance of payments (BOP) remained in surplus position as of end-February at $2.185 billion, an improvement from same period last year’s deficit of $259 million, based on Bangko Sentral ng Pilipinas (BSP) data.

For the month of February, however, the BOI reversed to a shortfall of $895 million from January’s $3.081 billion surplus.

The BOP is a summary of the economic transactions of a country with the rest of the world for a specific period. For now, the country has a BOP surplus which means it has more inflows of capital from its foreign exchange sources than imports. If the opposite happens and there are more imports, the BOP will be in deficit position.

The BSP said the cumulative BOP surplus was boosted by inflows from the government’s $3 billion Global Bond issuance last January. Personal remittances and foreign portfolio investments of $3.07 billion and $292 million, respectively, also contributed to the BOP surplus.

Meanwhile, the BOP deficit in February was due to the government’s net foreign currency withdrawals from its deposits with the BSP to settle its foreign currency debt obligations and pay for its various expenditures, said the BSP.

The BSP also released the final gross international reserves as of end-February of $98.2 billion, lower than what it initially reported last March 7 of $99.31 billion.

The GIR is lower than $100.7 billion as of end-January. Still, the BSP considers the current level of reserves as “more than adequate external liquidity buffer”. It is equivalent to 7.4 months’ worth of imports of goods and payments of services and primary income. It is also about 5.9 times the country’s short-term external debt based on original maturity and 3.9 times based on residual maturity.

The BSP’s Monetary Board last March 16 approved the latest BOP projections for 2023 of 2024.

For this year, the BSP expects a lower BOP deficit of $1.6 billion versus its earlier forecast of $5.4 billion back in December 2022. For 2024, the BOP deficit is seen to further drop to $500 million.