The country posted a lower balance of payments (BOP) surplus of $3.03 billion as of end-November after registering a shortfall of $216 million last month from paying maturing loans, according to the Bangko Sentral ng Pilipinas (BSP).
The BOP deficit for the month of November reversed the surplus in October of $1.51 billion. However, compared to the same month last year, the November deficit this year was lower than $756 million in 2022.
“The BOP deficit in November 2023 reflected outflows arising mainly from the National Government’s (NG) payments of its foreign currency debt obligations,” said the BSP.
Meanwhile, with improved trade activity this year, the 11-month BOP surplus of $3.03 billion likewise reversed the $7.875 billion deficit in the same period last year.
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 BSP said the January to November BOP position remained in surplus due to improvement in the balance of trade “alongside the higher net inflows from personal remittances, trade in services, and foreign borrowings by the NG.”
“Further, net inflows from foreign direct investments contributed to the surplus, albeit lower during the covered period,” said the BSP.
Based on the preliminary data from the Philippine Statistics Authority’s International Merchandise Trade Statistics, the trade deficit for the first 10 months of 2023 totaled $44.1 billion, down from the $50 billion deficit posted in the same period last year.
As for FDI, inflows fell to $5.88 billion in the first three quarters compared to $6.99 billion same time in 2022. For the month of September only, net FDI reached $422 million from $731 million last year.
The BSP also reported the final gross international reserves (GIR) as of end-November of $102.7 billion, up from $101 billion as of end-October 2023.
The latest GIR level represents a more than adequate external liquidity buffer equivalent to 7.6 months’ worth of imports of goods and payments of services and primary income, said the BSP. Moreover, it is also about 6.0 times the country’s short-term external debt based on original maturity and 3.7 times based on residual maturity, it added.
“The GIR level increased month-on-month, notwithstanding the BOP deficit in November 2023, due mainly to the upward revaluation adjustments in BSP gold holdings and foreign currency denominated assets. The impact of non-economic transactions such as revaluation adjustments is excluded in the computation of the BOP position,” the BSP explained.
Last week, the BSP’s Monetary Board approved revisions to the overall BOP outlook for 2023 and 2024.
For this year, the BSP is projecting a higher surplus of $1.1 billion, reversing its earlier $100-million deficit forecast.
For 2024, the BSP also revised the BOP estimates but lower to a surplus of $400 million versus the earlier forecast of $1 billion surplus.