BOP position in Q3 2022 reverses to deficit

Third Quarter 2022 Developments

The country’s balance of payments (BOP) position registered a deficit of US$4.7 billion in Q3 2022, a reversal from the US$1.3 billion surplus in the same quarter last year.

The reversal in the BOP position resulted on account of a wider current account deficit of US$5.8 billion (equivalent to -6.2 percent of the country’s GDP) in Q3 2022 compared with the US$974 million deficit (equivalent to -1.1 percent of the country’s GDP) recorded in the same quarter in 2021.

This development was driven by the wider trade in goods deficit, which was partly muted by the increase in net receipts in the primary and secondary income, and trade in services accounts.

Meanwhile, the financial account registered higher net inflows (or net borrowing by residents from the rest of the world) amounting to US$2.8 billion in Q3 2022 vis-à-vis the US$2.6 billion net inflows in Q3 2021, stemming from the sustained net inflows in the other investment, direct investment, and financial derivatives accounts.

January – September 2022 Developments

The BOP position posted a higher deficit of US$7.8 billion in the first nine months of 2022 from the US$665 million deficit recorded in the same period a year ago.

This outcome was primarily due to a wider current account deficit of US$17.8 billion (equivalent to -6.1 percent of GDP) compared to the US$2.3 billion deficit (equivalent to -0.8 percent of GDP) in the same period last year, which in turn was the result of a higher trade in goods deficit.

Meanwhile, the financial account registered higher net inflows of US$10.3 billion in the first three quarters of 2022 from the US$1.3 billion net inflows recorded in the same period last year.  This was mainly due to lower net outflows of portfolio investments and higher net inflows of other investments.

Gross International Reserves

The country’s gross international reserves (GIR) amounted to US$93.0 billion as of end-September 2022, lower than the US$106.6 billion registered as of end-September 2021.

Exchange Rate

The peso dollar averaged P56.36/US$1 in the third quarter of 2022. On a quarter-on-quarter basis, the peso depreciated by 6.6 percent from an average of P52.64/US$1 in the second quarter of 2022. Similarly, the peso depreciated by 11.1 percent from an average of P50.11/US$1 recorded in Q3 2021.