MANILA -The Philippines’ balance of payments (BOP) swung back to a deficit of $148 million in April, but narrower than $415 million in the same month of 2022, as the national government took on more foreign debt than it paid existing borrowings.
The BOP position has been alternating between deficit and surplus month after month since a $2.3-billion deficit was posted in September 2022.
Also, data at the Bangko Sentral ng Pilipinas (BSP) show that the results for April meant a swing away from the $1.27-billion surplus recorded in March.
“The BOP deficit in April 2023 reflected outflows arising mainly from the national government’s payments of its foreign currency debt obligations,” the BSP said in a statement.
The BOP is a statement of all transactions between the country and the rest of the world. It summarizes all transactions that individuals, companies and government bodies completed with persons or entities outside the country.
Meanwhile, the latest data from the Bureau of the Treasury show that the national government’s debt stock as of the end of March stood at P13.86 trillion. Of this amount, outstanding foreign debt amounted to an equivalent of P4.34 trillion.
The April BOP brought the January to April readout to a surplus of $3.3 billion or about 42 times the $79-million surplus recorded in the same period last year.
“Based on preliminary data, the cumulative BOP surplus reflected inflows that stemmed mainly from personal remittances, net foreign borrowings by the national government and foreign direct investments,” the BSP said.
Further, the BSP said the final gross international reserves (GIR) print as of the end of April showed $101.5 billion.
The GIR remained above the $100-billion mark for the second month in a row after sinking to $98.22 billion in February.
The BSP reiterated that the latest GIR level represented a more than adequate external liquidity buffer equivalent to 7.6 months’ worth of imports of goods and payments of services and primary income.
The GIR is also about six times the country’s short-term external debt based on original maturity and 4.1 times based on residual maturity.
Michael Ricafort, chief economist at the Rizal Commercial Banking Corp., said BOP data could still see support from the continued growth in the country’s structural US dollar inflows such as remittances from overseas Filipino workers, revenues from business process outsourcing, foreign direct investments, exports and foreign tourism receipts, among others.
“The proposed $2-billion US dollar or euro-denominated retail bonds to be offered by the national government in the third quarter of 2023, with a tenor of at least five years, would also be added to the country’s BOP and GIR by then,” Ricafort said.