BOP Posts $724-M Deficit in October; GIR Declines

The Philippines recorded a balance of payments (BOP) deficit of $724 million in October 2024, reversing the $1.5 billion surplus seen in the same period last year, the Bangko Sentral ng Pilipinas (BSP) reported.

The October deficit was attributed to the National Government’s net foreign currency withdrawals to settle debt obligations and fund various expenditures.

Despite this, the cumulative BOP position from January to October 2024 reached a surplus of $4.4 billion, up from $3.2 billion in the same period in 2023.

The BSP attributed the surplus to steady inflows from personal remittances, trade in services, and net foreign borrowings.

“Net foreign direct and portfolio investments also played a significant role in maintaining the positive cumulative BOP position,” the BSP noted in a statement.

Gross international reserves (GIR) fell to $111.1 billion as of the end of October, down from $112.7 billion in September.

The BSP emphasized that the current GIR level remains robust, equating to 8.0 months’ worth of imports and payments for services and primary income.

It also stands at 4.4 times the country’s short-term external debt based on residual maturity.

The BSP highlighted that the GIR ensures adequate liquidity to address external payment requirements in extreme scenarios.

This includes meeting import needs and servicing debt even in the absence of export revenues or foreign loans.

The October BOP data underlines the Philippines’ ongoing fiscal and external challenges, as the country balances increasing government expenditures with maintaining strong reserve levels.