Philippine BOP Deficit Hits $2.3 Billion in November

The Philippines recorded a $2.3 billion balance of payments (BOP) deficit in November 2024, a sharp increase from the $216 million deficit reported in November 2023.

The deficit primarily reflected the national government’s foreign currency withdrawals to settle debt obligations and fund expenditures, along with the Bangko Sentral ng Pilipinas’ (BSP) foreign exchange operations.

Despite the November shortfall, the cumulative BOP position from January to November 2024 registered a $2.1 billion surplus.

However, this surplus is lower than the $3 billion recorded during the same period in 2023.

The decline was attributed to reduced net receipts from trade in services and lower net foreign borrowings by the government.

On the upside, the decline was partly offset by sustained inflows from personal remittances and net foreign portfolio and direct investments.

As of the end of November 2024, gross international reserves (GIR) stood at $108.5 billion, down from $111.1 billion in October 2024.

The GIR remains a robust buffer, equivalent to 7.7 months of imports and service payments.

Additionally, it is 4.3 times the country’s short-term external debt based on residual maturity.

The BSP underscored the importance of the GIR as an external liquidity buffer in extreme conditions.

“While the cumulative surplus has moderated, remittance inflows and foreign investments continue to provide stability in external accounts,” BSP analysts noted.

The November BOP performance underscores the growing pressure on the country’s external accounts amid evolving global and domestic challenges.

The BSP pledged to monitor developments and implement measures to maintain external stability.