The central bank reported a higher balance of payments (BOP) deficit of $1.627 billion in the first five months after incurring a $1.397 billion shortfall for the month of May.

The end-May BOP deficit is a reversal of the $4.029 billion surplus recorded in the same period last year. The Bangko Sentral ng Pilipinas (BSP) said the cumulative BOP deficit for January to May was “partly attributed to wider merchandise trade deficit and net outflows of foreign portfolio investments.” The latest trade balance stood at $11.09 billion, up from $8.64 billion deficit last year.

The BOP shortfall for just the month of May of $1.397 billion is also a reversal of the $2.614 billion surplus in April this year and of the $2.431 billion surplus same time in 2020.

“The BOP deficit in May was mainly attributed to outflows arising from the foreign currency withdrawals of the National Government (NG) from its deposits with the BSP as the NG settled its foreign currency debt obligations and paid for various expenditures,” the BSP said. “These outflows were partly offset, however, by the inflows from the BSP’s foreign exchange operations and from the NG’s external borrowings that were deposited with the BSP.”

The BSP also reported a final gross international reserves (GIR) of $107.25 billion as of end-May, versus $107.71 billion end-April. “The BOP position reflects a decrease in the (GIR),” said the BSP.

The BSP has recently revised its BOP projection for this year to $7.1 billion, up from its previous forecast of $6.2 billion it announced last March.

The 2022 BOP surplus estimate is however revised lower to $2.7 billion versus previous forecast of $3.8 billion.

The higher BOP surplus projection for 2021 comes from the upward revision in the current account to a surplus of $10 billion, up from the March projection of $9.1 billion.

Prospects for 2022, based on BSP analysis, are also expected to “carry on the same momentum of recovery anticipated in the second half of 2021.”