The country’s balance of payments position posted a lower deficit of $53 million in July 2023, an improvement from the $1.8-billion shortfall a year ago, the Bangko Sentral ng Pilipinas said over the weekend.
“The BOP deficit in July 2023 reflected net outflows arising mainly from the national government’s payments of its foreign currency debt obligations,” the BSP said in a statement.
This resulted in a cumulative BOP surplus of $2.2 billion in the first seven months of 2023, a reversal from the $4.9-billion deficit recorded in the same period last year.
“This development reflected mainly the improvement in the balance of trade and the sustained inflows from personal remittances, net foreign borrowings by the national government, trade in services and foreign direct investments,” the BSP said.
The BOP surplus allowed the Bangko Sentral ng Pilipinas to raise its gross international reserves.
Data from the BSP showed that the GIR increased to $100 billion as of end-July from $99.4 billion as of end-June. The latest GIR level represented a more than adequate external liquidity buffer equivalent to 7.4 months’ worth of imports of goods and payments of services and primary income, the BSP said.
It was also about 5.9 times the country’s short-term external debt based on original maturity and 4.1 times based on residual maturity.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said BOP data in the coming months could still improve “with the continued growth in the country’s structural inflows as the economy reopened further towards greater normalcy.”
These include the OFW remittances, business process outsourcing revenues, exports, foreign tourism receipts and POGO revenues.
The BSP in June reduced its BDOP deficit forecast for 2023 to $1.2 billion from a previous estimate of $1.6-billion shortfall amid the narrowing trade deficit.
The BSP also expects a lower BOP deficit of $500 million for 2024.
The BOP deficit hit $7.3 billion last year, a turnaround from the $1.3-billion surplus in 2021.