BOP in September 2021 posts US$412M deficit, GIR settles at US$106.6B

The country’s overall balance of payments (BOP) position posted a deficit of US$412 million in September 2021, a reversal from the US$2.1 billion BOP surplus recorded in the same month last year.

The BOP deficit in September 2021 reflected outflows arising mainly from the debt service payment of the National Government’s (NG) foreign currency debt obligations.

For the period January to September 2021, the cumulative BOP position registered a deficit of US$665 million, a reversal from the US$6.88 billion surplus recorded in the same period a year ago.

Based on preliminary data, this cumulative BOP deficit was partly attributed to a wider merchandise trade deficit and lower net foreign borrowings by the NG compared to the same period last year.¹

The BOP position reflects a decrease in the final gross international reserves (GIR) level to US$106.6 billion as of end-September 2021 from US$107.96 billion as of end-August 2021.

The latest GIR level represents a more than adequate external liquidity buffer equivalent to 10.7 months’ worth of imports of goods and payments of services and primary income.² 

Moreover, it is also about 7.7 times the country’s short-term external debt based on original maturity and 5.3 times based on residual maturity.³

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¹ Based on the Philippine Statistics Authority’s (PSA) International Merchandise Trade Statistics, the trade balance for January-August 2021 reached US$25.25 billion, up from US$15.69 billion deficit posted in the same period last year.

² Specifically, it ensures availability of foreign exchange to meet balance of payments financing needs, such as for payment of imports and debt service, in extreme conditions when there are no export earnings or foreign loans.

³ Short-term debt based on residual maturity refers to outstanding external debt with original maturity of one year or less, plus principal payments on medium- and long-term loans of the public and private sectors falling due within the next 12 months.