The country’s balance of payments (BOP) surplus hugely declined to $1.34 billion in 2021 versus $16.02 billion in 2020 due to a wider overall trade gap, the central bank said.
The Bangko Sentral ng Pilipinas (BSP) also announced a final gross international reserves (GIR) of $108.79 billion for 2021, lower compared to 2020’s dollar stock of $110.12 billion. The BSP reports preliminary GIR numbers every second week of every month. The previous end 2021 GIR announced last Jan. 13 was $108.89 billion.
The end 2021 BOP surplus was below BSP’s projection of $1.61 billion while the GIR was also off the central bank’s projected $111 billion for 2021.
For the month of December alone, the BOP was in excess of $991 billion, reversing the $123 million deficit in November. Last year, the BOP was in a deficit position for seven months and the highest was in February with more than $2 billion shortfall.
“In December 2021, the BOP surplus, which was lower than the $4.24 billion BOP surplus recorded in December 2020, reflected the structural inflows for the year, such as the BSP’s income from its investments abroad, personal remittances, trade in services, foreign direct investments, and net foreign borrowings by the National Government (NG),” said the BSP. “However, these inflows were moderated by a wider trade in goods deficit,” it added.
Based on preliminary data from the Philippine Statistics Authority’s International Merchandise Trade Statistics, the trade deficit for January-November 2021 amounted to $37.92 billion, up from the $22.15 billion same period in 2020.
Last Dec 9, the central bank reduced its BOP surplus and GIR projections for 2022 due to lingering pandemic-related uncertainties, but officials still think the country’s external sector is healthy and improving as global growth moves to a post-COVID-19 era.
The BSP expects the BOP to have a lower surplus this year of $700 million from a previous projection of $1.7 billion it announced in September 2021. The GIR, meantime, is expected to reach $112 billion by end-2022, also lower than earlier forecast of $115 billion.
The BSP has said that the global economic recovery will remain “broadly on track” despite that growth prospects of some advanced economies were significantly downgraded. “These warrant continued vigilance of the Philippines’ major trade and investment partners,” it said.