LACKLUSTER trade performance and the repayment of the national government’s foreign loans placed the country’s balance of payments (BOP) position in negative territory for the second straight month, according to the Bangko Sentral ng Pilipinas (BSP).
In a statement, BSP said the BOP deficit in February brought the current year-to-date BOP level to a $936-million deficit—a reversal from the $2.2-billion surplus recorded in January-February 2023.
Based on the preliminary data from the Philippine Statistics Authority’s (PSA) International Merchandise Trade Statistics (IMTS), the trade deficit for January 2024 reached $4.2 billion, down from the $5.6-billion deficit posted in January 2023.
“Based on preliminary data, this cumulative BOP deficit reflected mainly the continued trade in goods deficit coupled with the NG’s net repayments of its foreign loans,” the BSP said.
In February, BSP said the country’s BOP position posted a deficit of $196 million lower than the $895-million BOP deficit recorded in February 2023.
The BOP position reflects a decrease in the final gross international reserves (GIR) level to $102 billion as of end-February 2024 from $103.3 billion as of end-January 2024.
“Notwithstanding the decline, the latest GIR level represents a more than adequate external liquidity buffer equivalent to 7.5 months’ worth of imports of goods and payments of services and primary income,” BSP said.
BSP said this ensures the 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 country’s BOP position is estimated to be six times the country’s short-term external debt based on original maturity and 3.6 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.