Bop Posts US$196 Million Deficit in February 2024

The country’s overall balance of payments (BOP) position posted a deficit of US$196 million in February 2024, lower than the US$895 million BOP deficit recorded in February 2023. The BOP deficit in February 2024 reflected outflows arising mainly from the National Government’s (NG) payments of its foreign currency debt obligations.

Meanwhile, the BOP deficit in February brought the current year-to-date BOP level to US$936 million deficit, which was a reversal from the US$2.2 billion surplus recorded in January-February 2023. Based on preliminary data, this cumulative BOP deficit reflected mainly the continued trade in goods deficit coupled with the NG’s net repayments of its foreign loans.^[1]

The BOP position reflects a decrease in the final gross international reserves (GIR) level to US$102.0 billion as of end-February 2024 from US$103.3 billion as of end-January 2024. Notwithstanding the decline, the latest GIR level represents a more than adequate external liquidity buffer equivalent to 7.5 months’ worth of imports of goods and payments of services and primary income.^[2] Moreover, it is also about 6.0 times the country’s short-term external debt based on original maturity and 3.6 times based on residual maturity.^[3]

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[1] Based on the preliminary data from the Philippine Statistics Authority’s (PSA) International Merchandise Trade Statistics (IMTS), the trade deficit for January 2024 reached US$4.2 billion, down from the US$5.6 billion deficit posted in January 2023.

[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.