BOP Position in Q2 2022 reverses to a deficit; post a higher deficit in the first half of 2022

The country’s balance of payments (BOP) position registered a deficit of US$3.6 billion in Q2 2022, a reversal from the US$905 million surplus recorded in the same quarter last year.

The reversal was due to a wider current account deficit of US$7.9 billion (equivalent to -7.7 percent of the country’s GDP) in Q2 2022, compared with the US$1.3 billion deficit (equivalent to -1.3 percent of the country’s GDP) recorded in the same quarter in 2021.

This development was driven by the widening of the trade in goods deficit, which was partly muted by the increase in net receipts in the primary and secondary income, and trade in services accounts.

Meanwhile, the financial account registered net inflows (or net borrowing by residents from the rest of the world) amounting to US$2.87 billion in Q2 2022 stemming from sustained inflows in the foreign direct and other investment accounts.

January – June 2022 Developments

The BOP position posted a higher deficit of US$3.1 billion in the first half of 2022 from the US$1.9 billion deficit recorded in the same period a year ago.  This outcome was primarily due to the widening of the current account deficit on account of a higher trade deficit. Meanwhile, the financial account reversed to net inflows in the first six months of 2022 from net outflows in the same period last year due to lower net outflows of portfolio investments and higher net inflows of other investments.

Gross International Reserves

The country’s gross international reserves (GIR) amounted to US$100.9 billion as of end-June 2022, lower than the US$105.8 billion level registered as of end-June 2021.

Exchange Rate

The peso dollar averaged P52.64/US$1 in the second quarter of 2022. On a quarter-on-quarter basis, the peso depreciated by 2.1 percent from an average of P51.53/US$1 in the first quarter of 2022. Similarly, the peso depreciated by 8.5 percent from an average of P48.18/US$1 recorded in Q2 2021.