20-2-2024 (MANILA) The Philippines’ overall balance of payments (BOP) experienced a significant shift in January 2024, with a deficit of $740 million, according to the country’s central bank, the Bangko Sentral ng Pilipinas (BSP). This marks a reversal from the BOP surplus of $3.1 billion recorded in the same period last year.
The BSP explained that the BOP deficit in January was primarily driven by outflows resulting from the national government’s payment of its foreign currency debt obligations. This development has raised concerns about the country’s financial position.
Highlighting the impact of this deficit, the BSP noted that the final gross international reserves (GIR) level declined to $103.3 billion by the end of January 2024, compared to $103.8 billion at the end of December 2023.
Despite the decrease, the BSP assured that the current GIR level remains a robust external liquidity buffer, which is equivalent to approximately 7.7 months’ worth of imports of goods and payments of services and primary income. This indicates a satisfactory level of financial resilience for the country.
Additionally, the current GIR level stands at about six times the country’s short-term external debt based on original maturity and 3.9 times based on residual maturity. This reassures the Philippines’ ability to meet its financial obligations in the short term.
