The balance of currency flows in the Philippines tipped to a surplus of $353 million in the 11 months to end-November this year, just 3 percent of the $11.8 billion recorded in the same period of 2020.
Also, according to the Bangko Sentral ng Pilipinas (BSP)), preliminary data on the 11-month balance of payments (BOP)—the sum of the domestic economy’s transactions with the rest of the world—reflected inflows such as from personal remittances, trade in services, net foreign borrowings by the national government, and foreign direct investments.
Gross int’l reserves
These factors were partly offset by a wider trade in goods deficit which, in the 10 months to October jumped to $33.21 billion from $20 billion in the same period of 2020.
The BSP said the Philippines’ overall BOP position as of November also reflected a decrease in the final gross international reserves (GIR) level, which settled at $107.72 billion at end-November from $107.89 billion at end-October.
“The latest GIR level represents a more than adequate external liquidity buffer equivalent to 10.2 months’ worth of imports of goods and payments of services and primary income,” the regulator said.
Forex reserves
“Specifically, it [GIR level] ensures 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,” the BSP added.
Additionally, the GIR level as of end-November was about 8.7 times the country’s short-term external debt based on original maturity and 5.7 times based on residual maturity.
Short-term debt based on residual maturity refers to outstanding external debt with original maturity of one year or less, plus principal payments on medium- and long-term loans of the public and private sectors falling due within the next 12 months.
In November alone, the Philippine BOP position leaned to a deficit of $123 million, swinging away from a surplus of $1.47 billion in the same month of 2020.
“The BOP deficit in November 2021 reflected outflows arising mainly from the national government’s (NG) foreign currency withdrawals from its deposits with the BSP as the NG settled its foreign currency debt obligations and paid for various expenditures,” the BSP said.