The Philippines recorded a balance of payments (BOP) deficit of $1.5 billion in December 2024, a reversal from the $642-million surplus observed in the same month of 2023, the Bangko Sentral ng Pilipinas (BSP) said Tuesday.
The December deficit reflected the BSP’s net foreign exchange operations and drawdown on the national government’s (NG) deposits with the BSP to pay off its foreign currency debt obligations.
Despite the deficit in December, the cumulative BOP position registered a surplus of $609 million in 2024, lower than the $3.7-billion surplus seen in 2023.
The BSP said that based on preliminary data, the decline in the cumulative BOP surplus was due to higher trade in goods deficit and lower net receipts from trade in services and net foreign borrowings by the national government.
The decline was partly muted by the continued net inflows from personal remittances and net foreign portfolio and direct investments.
The BOP position reflects a decrease in the final gross international reserves (GIR) level to $106.3 billion as of end-December 2024 from $108.5 billion as of end-November.
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.
It was also about 3.7 times the country’s short-term external debt based on residual maturity.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the latest BOP and GIR data were supported by the continued growth in the country’s structural US dollar inflows such as OFW remittances, BPO revenues, exports, foreign investments and foreign tourism revenues amounting to $8.7 billion brought in by 5.45 million foreign tourists in 2024.
“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 (new record highs on a monthly basis posted in December 2023,” said Ricafort.