BOP deficit narrowed further to $57M in Aug, says BSP

MANILA  -The Philippines’ balance of payments (BOP) showed a much narrower deficit for the fifth month in a row at $57 million last August, down from $572 million in the same month last year, data at the Bangko Sentral ng Pilipinas (BSP) show.

The latest monthly readout on the tally of the country’s transactions with the rest of the world is, on the other hand, more than the $53-million BOP deficit recorded last July.

“The BOP deficit in August 2023 reflected net outflows arising mainly from the national government’s payments of its foreign currency debt obligations,” the BSP said in a statement.

Still, the cumulative BOP since the start of this year remained at a surplus, with $2.15 billion and represented a turnaround from an eight-month deficit of $5.59 billion in 2022.

“Based on preliminary data, this development reflected mainly the improvement in the balance of trade and the sustained net inflows from personal remittances, trade in services, and foreign borrowings by the national government,” the central bank added.

Further, the BSP said gross international reserves (GIR) eased to $99.6 billion at the end of August.

This final GIR print for August was less than the preliminary figure of $99.8 billion reported earlier this month, and meant a decrease of $400 million from the $100 billion recorded at the end of July. The GIR remains a more-than-adequate external liquidity buffer, being equivalent to 7.4 months’ worth of imports of goods and payments of services and primary income.

The stock is also about 5.7 times the country’s short-term external debt based on original maturity and 3.9 times based on residual maturity.

Last Sept. 15, the BSP said the expected full-year BOP deficit in 2023 was even narrower at just $100 million instead of the $1.2 billion forecast in June.

—Ronnel W. Domingo