The country’s overall balance of payments (BOP) position posted a deficit of US$639 million in April 2024, higher than the US$148 million BOP deficit recorded in April 2023.
The BOP deficit in April 2024 reflected outflows arising mainly the National Government’s (NG) net foreign currency withdrawals from its deposits with the BSP to settle its foreign currency debt obligations and pay for its various expenditures.
Meanwhile, the BOP deficit in April 2024 brought the current year-to-date BOP level to a US$401 million deficit, a reversal from the US$3.3 billion surplus recorded in January-April 2023.
Based on preliminary data, this cumulative BOP deficit reflected mainly the NG’s repayments of its foreign loans coupled with the continued trade in goods deficit.[1]
The BOP position reflects a decrease in the final gross international reserves (GIR) level to US$102.6 billion as of end-April 2024 from US$104.1 billion as of end-March 2024.
The latest GIR level represents a more than adequate external liquidity buffer equivalent to 7.6 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 3.6 times based on residual maturity.[3]
[1] Based on the preliminary data from the Philippine Statistics Authority’s (PSA) International Merchandise Trade Statistics (IMTS), the trade deficit for January-March 2024 reached US$11.2 billion, down from the US$14.5 billion deficit posted in January-March 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.
