The country’s balance of payments position could improve in the coming months with the continued increase in structural inflows as the economy reopens further towards greater normalcy, an economist said Friday.
Michael Ricafort, chief economist of Rizal Commercial Banking Corp., said any improvement in BOP could be driven by sustained growth in remittances, business process outsourcing revenues, export revenues, foreign tourism receipts and revenues from Philippine offshore gaming operations.
“The recent decline in the prices of global crude oil [among the lowest since the early part of January 2022 or before the Russia-Ukraine conflict started on February 24, 2022] and also the decline in other global commodities could help reduce the country’s trade deficit,” Ricafort said.
The Bangko Sentral ng Pilipinas said earlier that BOP position in 2022 posted a deficit of $7.3 billion, a reversal from the $1.3-billion surplus recorded in 2021.
BOP posted a surplus of $612 million in December 2022, albeit lower than the $991-million surplus recorded in the same month in 2021
The BOP surplus in December 2022 reflected inflows arising mainly from the BSP’s net foreign exchange operations and net income from its investments abroad, BSP said in a statement.
The BOP surplus in December trimmed the full-year deficit to $7.3 billion from a deficit of $7.9 billion in January to November 2022.
The gross international reserves increased to $96.1 billion as of end-December 2022 from $95.1 billion as in December.
The latest GIR level 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.
BOP is the difference in total value between payments into and out of a country over a period.
