BOP posts US$756 million deficit in November 2022

The country’s overall balance of payments (BOP) position posted a deficit of US$756 million in November 2022, higher than the US$123 million BOP deficit recorded in the same month last year.

The BOP deficit in November 2022 reflected outflows arising mainly from the National Government’s payments of its foreign currency debt obligations and the Bangko Sentral ng Pilipinas’ net foreign exchange operations.

Meanwhile, the BOP deficit in November brought the current year-to-date BOP level to US$7.9 billion deficit, a reversal from the US$353 million surplus recorded in the same period a year ago.

Based on preliminary data, this cumulative BOP deficit was due to the widening trade in goods deficit as goods imports continued to surpass goods exports on the back of the increase in international commodity prices and resumption in domestic economic activities.^[1]

The gross international reserves (GIR) level increased to US$95.1 billion as of end-November 2022 from US$94.0 billion as of end-October 2022.

Nonetheless, the latest GIR level represents a more than adequate external liquidity buffer equivalent to 7.2 months’ worth of imports of goods and payments of services and primary income.^[2]

Moreover, it is also about 5.8 times the country’s short-term external debt based on original maturity and 3.8 times based on residual maturity.^[3]

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^[1] Based on preliminary data from the Philippine Statistics Authority’s (PSA) International Merchandise Trade Statistics (IMTS), the trade deficit for January-October 2022 reached US$50.0 billion, up from the
US$32.4 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.