The central bank said Thursday, (April 29) that the Philippines continued to incur a balance of payments (BOP) deficit of $2.844 billion at the end of the first quarter.

For the month of March only, the shortfall dropped to $73 million compared to $2.019 billion in February and $752 million deficit in January, according to Bangko Sentral ng Pilipinas (BSP) data.

“The country’s overall BOP position posted a deficit of $73 million in March, a reversal from the $448 million BOP surplus recorded in the same month last year,” said the BSP, adding that the deficit “reflected outflows arising mainly from the National Government’s (NG) net withdrawal of its foreign currency deposits with the BSP, which were largely used for debt servicing.”

The first quarter BOP deficit same time in 2020 was only $68 million. Last year’s full-year BOP eventually amounted to a surplus of $16.022 billion, the biggest surplus on record.

“Based on preliminary data, this cumulative BOP deficit was due largely to the NG’s net repayments of its foreign loans and the country’s merchandise trade deficit,” said the BSP.

The BSP also reported a final gross international reserves (GIR) number of $104.48 billion as of end-March 2021, lower than February’s $105.16 billion.

The latest GIR level is considered “more than adequate external liquidity buffer, which can help cushion the domestic economy against external shocks.”

The BSP forecasts a BOP surplus of $6.2 billion this year and $3.8 billion in 2022. The GIR is expected to hit $114 billion this year and $117 billion in 2022 but this week, Diokno said he sees GIR climbing to $120 billion by end-2021.

The BSP said that “on balance, the latest BOP assessment for 2021 reflects optimism amid expectations of gradual strengthening of the economy anchored mainly on positive developments on the rollout of COVID-19 vaccines, better-than-anticipated global growth momentum and continued strong government support to stimulate recovery.”