The Bangko Sentral ng Pilipinas (BSP) on Thursday, Oct. 19, reported a balance of payments (BOP) surplus of $1.736 billion as of end-September, lower than end-August’s $2.15 billion as the government paid some of its maturing obligations.
The decline in the BOP surplus was due to a $414 million shortfall posted for the month of September. This is a larger deficit compared to $57 million in August.
The BOP is a summary of the economic transactions of a country with the rest of the world for a specific period. It is an accounting of the economic dealings between residents and non-residents. A BOP surplus position means there are more exports or inflows than imports or outflows, while a deficit position is the opposite.
The latest BOP position of $1.736 billion is a reversal and a significant improvement from same period last year of $7.831 billion which was a deficit.
For the monthly tally, the September deficit of $414 million is lower compared to same time in 2022 of $2.339 billion deficit.
According to the BSP, the September 2023 BOP shortfall “reflected net outflows arising mainly from the National Government’s (NG) payments of its foreign currency debt obligations.”
As for the year-to-date results, the BSP said the reversal in the BOP position was due to the improvement in the balance of trade and the higher net inflows from personal remittances, trade in services, and government foreign borrowings.
Meanwhile, the BSP also reported the final gross international reserves (GIR) of $98.1 billion as of end-September this year, lower than end-August of $99.6 billion.
The latest GIR level is still “more than adequate external liquidity buffer,” said the BSP. It is equivalent to 7.3 months’ worth of imports of goods and payments of services and primary income, and about 5.7 times the country’s short-term external debt based on original maturity and 3.6 times based on residual maturity.
Last month, the BSP’s Monetary Board revised the BOP projections for 2023 and 2024. For this year, the BSP expects a lower BOP deficit of $100 million while for next year, it has changed its outlook from a deficit to a surplus of $1 billion.
From its previous June projections, the BSP thought the BOP will report a deficit of $1.2 billion for 2023 and a lower deficit of $500 million for next year.
Since the pandemic, the BSP revises its BOP projections quarterly versus a pre-pandemic twice-a-year review of external accounts.
The GIR, on the other hand, is expected to end 2023 at $99.5 billion. This was slightly lower from the June forecast of $100 billion.
In changing the overall BOP position for 2023 and 2024, the BSP also made upward revisions to services exports, travel receipts and revenues of the business process outsourcing sector.