The country’s balance of payments yielded a deficit of $7.3 billion in 2022, a reversal of the $1.3-billion surplus recorded in 2021, as imports outstripped exports amid the recovery of domestic demand and higher commodity prices, data from the Bangko Sentral ng Pilipinas show.
“Based on preliminary data, this cumulative BOP deficit was due to the widening trade in goods deficit as goods imports continued to surpass goods exports on the back of the increase in international commodity prices and resumption in domestic economic activities,” the BSP said.
BSP officials said, however, that the actual 2022 BOP deficit was smaller than the projected $11.2-billion shortfall for the year following the strong dollar inflows in December.
The BSP said the BOP posted a surplus of $612 million in December, reflecting “inflows arising mainly from the Bangko Sentral ng Pilipinas’ net foreign exchange operations and net income from its investments abroad.”
BOP is the difference in total value between payments into and out of a country over a period.
Meanwhile, the gross international reserves climbed to $96.1 billion as of end-December 2022 from $95.1 billion in November. The figure, however, fell from $108.8 billion recorded in the same month in 2021.
Reserves fell year-on-year as peso declined to a record-low of 59 against the US dollar in October, before recovering in the succeeding months as oil prices eased and remittances picked up ahead of the holidays. The peso closed at 54.63 against the greenback Thursday.
Data showed that the BSP’s reserves as of end-December included $81.32 billion in foreign investments, $9.28 billion in gold holdings, $3.70 billion in special drawing rights, $912.4 million in foreign exchange and $789.4 million in reserve position in the Fund.
The BSP said the latest GIR level still represented a more than adequate external liquidity buffer equivalent to 7.3 months’ worth of imports of goods and payments of services and primary income.
It was 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 earlier raised the projected BOP deficit in 2022 to $11.2 billion from the $8.4-billion shortfall made previously, taking into consideration the further weakening of global demand.
It said the emerging BOP outlook over the near term remained subdued as external risks had intensified relative to the last forecast round in June 2022.
These risks included further downward revision in global growth prospects, record-high inflation print worldwide, more aggressive monetary policy tightening by major central banks, continued economic slump in China and lingering Ukraine-Russia conflict.