BOP surplus, dollar reserves down in April


The country’s balance of payments (BOP) surplus and gross international reserves (GIR) were both lower as of end-April due to government payments of maturing foreign loans, according to the Bangko Sentral ng Pilipinas (BSP).

The BOP surplus dropped to $79 million as of end-April from $495 million in March after incurring a $415 million deficit for the month of April. The shortfall in April was the biggest monthly deficit so far this year.

US dollar Reuters/File Photo (Manila Bulletin)

The BSP also reported a final foreign exchange reserves of $105.4 billion as of end-April, which was much lower than what it initially announced in mid-May of $106.76 billion. The US dollar buffer declined by $1.91 billion from end-March’s $107.31 billion.

Meantime, the small BOP surplus of $79 million as of end-April was a reversal of the $231 million deficit same time in 2021. “Based on preliminary data, the cumulative BOP surplus reflected inflows that stemmed mainly from personal remittances, net foreign borrowings by the NG (National Government), and foreign direct investments,” said the BSP.

As for the $415 million deficit for the month of April only, this was due to outflows as the NG transacted foreign currency withdrawals from its deposits with the BSP to settle its foreign currency debt obligations and partly for expenditures.

For 2022, the BSP forecasts a BOP deficit of $4.3 billion because of lingering global uncertainties amid the Russia-Ukraine war and its impact on international markets such as commodity prices. Last year, the country’s BOP was in a surplus position of $1.34 billion but it was significantly lower from 2020’s $16 billion surplus.

The BSP said the updated GIR level is still considered adequate external liquidity buffer. It is equivalent to 9.3 months’ worth of imports of goods and payments of services and primary income, and about 6.7 times the country’s short-term external debt based on original maturity and 4.5 times based on residual maturity.

The GIR forecast remains at $108 billion for this year. The GIR will still be supported by foreign borrowings by the government and potential increase in the volume of gold purchases, said the BSP.

At the end of 2021, the country’s outstanding external debt stood at $106.43 billion, up by 8.1 percent from $98.49 billion in 2020. The external debt is now bigger than the GIR level as of end-April of $105.4 billion.

The BSP said external debt has remained at manageable levels in terms of GDP ratio in 2021 and in 2020. As a solvency indicator, the GDP ratio still “indicates the country’s sustained strong position to service foreign borrowings in the medium to long-term,” said the BSP.