The country’s overall balance of payments (BOP) position posted a surplus of US$1.3 billion in March 2023, higher than the US$754 million BOP surplus recorded in the same month last year.
The BOP surplus in March 2023 reflected inflows arising mainly from the National Government’s (NG) net foreign currency loans, which were deposited with the BSP, and net income from the BSP’s investments abroad.[1]
The BOP surplus in March brought the current year-to-date BOP level to US$3.5 billion surplus, markedly higher than the US$495 million surplus recorded in the same period a year ago.
Based on preliminary data, the cumulative BOP surplus reflected inflows that stemmed mainly from personal remittances, net foreign borrowings by the NG, and foreign direct investments.
The gross international reserves (GIR) level increased to US$101.5 billion as of end-March 2023 from US$98.2 billion as of end-February 2023.
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 6.1 times the country’s short-term external debt based on original maturity and 4.2 times based on residual maturity.[3]
[1] The said deposits include the financing from the International Bank for Reconstruction and Development (IBRD) for the Philippines Second Financial Sector Reform Development Policy, amounting to US$600 million, and the Asian Development Bank (ADB) for the (1) Competitive and Inclusive Agriculture Development Program – Subprogram 2, amounting to US$500 million and (2) Post-COVID-19 Business and Employment Recovery Program – Subprogram 1, amounting to US$500 million.
[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.
