19-8-2023 (MANILA) The Philippines’ balance of payments (BOP) in July 2023 stood at 53 million, a notable decrease from the BOP deficit of 1.8 billion U.S. dollars recorded in July 2022, as per data released by the Philippine central bank on Friday night.
The Bangko Sentral ng Pilipinas (BSP) reported that the BOP deficit in July this year primarily stemmed from net outflows, largely attributed to the national government’s settlement of its foreign currency debt obligations.
Despite the July deficit, the BSP highlighted that the country’s cumulative BOP position showed a surplus of 2.2 billion U.S. dollars in the first seven months of the year.
“This level marks a significant turnaround from the 4.9 billion U.S. dollars deficit recorded in the same period a year ago,” the BSP noted.
Based on preliminary figures, the BSP explained that this improvement was mainly a result of better trade balance and continued inflows from personal remittances, the national government’s net foreign borrowings, trade in services, and net foreign direct investments.
Furthermore, the BSP reported an increase in the gross international reserves (GIR), which reached 100 billion U.S. dollars as of the end of July 2023, up from 99.4 billion U.S. dollars at the end of June 2023.
According to the BSP, this latest GIR level represents a more than sufficient external liquidity buffer, equivalent to 7.4 months’ worth of imports of goods and payments of services and primary income.
The BSP also noted that the July GIR level is approximately 5.9 times the Philippines’ short-term external debt based on the original maturity and 4.1 times based on residual maturity.
