The country’s overall balance of payments (BOP) position posted a deficit of US$155 million in June 2024, lower than the US$606 million BOP deficit recorded in June 2023.
The BOP deficit in June 2024 reflected outflows arising mainly from the National Government’s (NG) payments of its foreign currency debt obligations.
Notwithstanding the deficit in June, the cumulative BOP position registered a surplus of US$1.4 billion in January to June 2024, lower than the US$2.3 billion surplus recorded in January to June 2023.
Based on preliminary data, this cumulative BOP surplus reflected mainly the narrowing trade in goods deficit alongside the continued net inflows from personal remittances, trade in services, net foreign direct investments, net foreign borrowings by the NG, and net foreign portfolio investments.[1]
The gross international reserves (GIR) level increased to US$105.2 billion as of end-June 2024 from US$105.0 billion as of end-May 2024.
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.[2]
Moreover, it is also about 6.0 times the country’s short-term external debt based on original maturity and 3.8 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-May 2024 reached US$20.6 billion, down from the US$23.7 billion deficit posted in January-May 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.
