The country’s balance of payments position in the first two months remained at a surplus of $2.2 billion, a reversal from the $259-million deficit a year ago despite a bigger shortfall in February, data from the Bangko Sentral ng Pilipinas show.
The cumulative BOP surplus reflected inflows that stemmed mainly from the government’s global bond issuance in January, remittances and foreign portfolio investments.
Cash remittances in January grew 3.5 percent to $2.76 billion from $2.67 billion a year ago, although this growth was slower compared to the 5.8-percent expansion in December 2022 as overseas Filipino workers usually send more money during the holiday season.
The BOP posted a deficit of $895 million in February, higher than the $157-million shortfall recorded in the same month last year.
“The BOP deficit in February 2023 reflected outflows arising mainly from 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.
The gross international reserves decreased to $98.2 billion as of end-February from $100.7 billion in January. 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.
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.
The BSP lowered on Friday its 2023 BOP deficit forecast to $1.6 billion from a previous assumption of $5.4-billion deficit, as it expected an improvement in the external sector in the coming months.
Gross international reserves are expected to reach $100 billion this year, higher than the previous forecast of $93 billion and increase further to $102 billion next year.
The BSP said remittances would grow 3 percent this year and in 2024, slower than previous assumption of 4-percent increase.
The BOP deficit hit $7.3 billion last year, a turnaround from the $1.3-billion surplus in 2021.