The Philippines’ balance of payments (BOP) position posted a deficit of $724 million in October 2024, a reversal from the $1.5-billion surplus recorded in October 2023, the Bangko Sentral ng Pilipinas (BSP) said Wednesday.
“The BOP deficit in October 2024 reflected the national government’s net foreign currency withdrawals from its deposits with the BSP to settle its foreign currency debt obligations and pay for its various expenditures,” the BSP said.
Despite the deficit in October, the cumulative BOP position registered a surplus of $4.4 billion from January to October 2024, up from the $3.2-billion surplus recorded a year ago.
“The surplus reflected in part the continued net inflows from personal remittances, trade in services, and net foreign borrowings by the NG. Furthermore, net foreign direct and portfolio investments contributed to the BOP surplus,” the BSP said.
The BSP said the BOP position reflects a decrease in the final gross international reserves (GIR) level to $111.1 billion as of end-October 2024 from $112.7 billion in September.
The latest GIR level represents a more than adequate external liquidity buffer equivalent to 8.0 months’ worth of imports of goods and payments of services and primary income, it said.
It was also about 4.4 times the country’s short-term external debt based on residual maturity.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp. (RCBC), said the latest BOP and GIR data could have been supported by the continued growth in the country’s structural US dollar inflows such as OFW remittances, BPO revenues, exports, foreign investments, foreign tourism revenues.
“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,” Ricafort said.
“Going forward, the country’s net foreign direct investments (FDIs) could still pick up, after coming from among the highest levels since the pandemic started, as the economy reopened towards greater normalcy, Philippine economy still expected to have one of the fastest economic growth rates in the region, the country’s attractive demographics, economic reopening of China [which is the world’s second biggest economy] since December 2022, investment commitments obtained by the new administration from overseas visits/trips in recent months,” he said.
