The country’s overall balance of payments (BOP) position posted a deficit of US$740 million in January 2024, a reversal from the US$3.1 billion BOP surplus recorded in the same month last year.
The BOP deficit in January 2024 reflected outflows arising mainly from the National Government’s (NG) payments of its foreign currency debt obligations.
The BOP position reflects a decrease in the final gross international reserves (GIR) level to US$103.3 billion as of end-January 2024 from US$103.8 billion as of end-December 2023.
Notwithstanding the decline, the latest GIR level represents a more than adequate external liquidity buffer equivalent to 7.7 months’ worth of imports of goods and payments of services and primary income.[1]
Moreover, it is also about 6.0 times the country’s short-term external debt based on original maturity and 3.9 times based on residual maturity.[2]
[1] 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.
[2] 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.
