The Philippines’ balance of payments position yielded a deficit in January 2024 on outflows related to the government’s payments of its foreign currency debt, the Bangko Sentral ng Pilipinas (BSP) said Tuesday.
Data from BSP showed the BOP position resulted in a deficit of $740 million in January, a reversal of the $3.1-billion surplus recorded in the same month last year.
“The BOP deficit in January 2024 reflected outflows arising mainly from the national government’s payments of its foreign currency debt obligations,” the BSP said.
The BOP position reflects a decrease in the final gross international reserves (GIR) level to $103.3 billion as of end-January 2024 from $103.8 billion as of end-December 2023.
“Notwithstanding the decline, the latest GIR level represents a more than adequate external liquidity buffer equivalent to 7.7 months’ worth of imports of goods and payments of services and primary income,” the BSP said.
“Moreover, it is also about 6.0 times the country’s short-term external debt based on original maturity and 3.9 times based on residual maturity,” it said.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said 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 and international tourism receipts.
“For the coming months, BOP data could still improve with the continued increase/growth in the country’s structural inflows as the economy reopens/recovers further towards greater normalcy, in terms of the continued year-on-year growth OFW remittances to new record highs on a monthly basis posted in December 2023,” Ricafort said.