BOP swings to deficit in April 2024 in Philippines

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The Philippines' balance of payments (BOP) position reverted to a $639 million deficit in April this year, data from the Bangko Sentral ng Pilipinas (BSP) showed.

In a press release on Monday evening, the BSP said that the country's BOP saw an inversion from the $1.17 billion surplus in March 2024.

The latest BOP print is also higher than the $148 million BOP in March 2023.

The central bank attributed the outflows to the national government's (NG) net foreign currency withdrawals from its deposits with the BSP to 'settle its foreign currency debt obligations and pay for its various expenditures.'

The BOP records all economic transactions between a country and the rest of the world over a certain period, covering trade in goods, services and capital.

A surplus indicates that more money entered the country than left, while a deficit indicates that more money exited the country than entered.

Meanwhile, the deficit in April 2024 brought the country's current year-to-date payment position to a $401 million deficit, a significant shift from the $3.3 billion surplus recorded from January to April 2023.

'Based on preliminary data, this cumulative BOP deficit reflected mainly the NG's repayments of its foreign loans coupled with the continued trade in goods deficit,' BSP said.

The BOP position indicates a drop in the gross international reserves (GIR) to $102.6 billion at the end of April this year, down from $104.1 billion at the end of the previous month.

Despite this decrease, the GIR remains a robust external liquidity buffer, sufficient to cover 7.6 months of imports and payments for services and primary income, according to the central bank.

'Moreover, it is also about 5.8 times the country's short-term external debt based on original maturity and 3.6 times based on residual maturity,' BSP said.