The Philippines posted a balance of payments (BOP) deficit of $665 million in the first nine months or as of end-September, reversing the $6.88 billion surplus recorded same time last year, the central bank said.
For the month of September only, data from the Bangko Sentral ng Pilipinas (BSP) showed a reversal of the $1.04 billion surplus in August to a deficit of $412 million last month. The September BOP also reversed the $2.10 billion surplus same time in 2020.
“The BOP deficit in September 2021 reflected outflows arising mainly from the debt service payment of the National Government’s (NG) foreign currency debt obligations,” said the BSP.
As for the cumulative BOP position which was a deficit of $665 million, the BSP said this was partly due to “a wider merchandise trade deficit and lower net foreign borrowings by the NG compared to the same period last year.” Based on the Philippine Statistics Authority’s International Merchandise Trade Statistics, the end-August trade balance of $25.25 billion was higher than $15.69 billion deficit posted in the same period in 2020.
The BSP also released the final gross international reserves level as of end-September of $106.6 billion. This external liquidity buffer is equivalent to 10.7 months’ worth of imports of goods and payments of services and primary income and about 7.7 times the country’s short-term external debt based on original maturity and 5.3 times based on residual maturity.
The BOP report is a comprehensive review of the country’s current account or the trade-in-goods and services, income, and current transfers, as well as the capital and financial accounts which are direct, portfolio and other investments.
Last month, the BSP revised anew its external accounts projection based on the latest global developments. The BOP is now expected to have a lower surplus of $4.1 billion for 2021 versus previous estimate (June) of $7.1 billion.
For 2022, the BSP also downgraded its BOP surplus projection to $1.7 billion from $2.7 billion.