The country’s overall balance of payments (BOP) position posted a deficit of US$157 million in February 2022, significantly lower than the US$2.02 billion BOP deficit recorded in the same month last year.
The BOP deficit in February 2022 reflected outflows arising mainly from the National Government’s (NG) foreign currency withdrawals from its deposits with the BSP as the NG paid for its various expenditures and settled its foreign currency debt obligations.
The BOP deficit in February brought the cumulative BOP level for January-February 2022 to US$259 million deficit, significantly lower than the US$2.77 billion deficit recorded in the same period a year ago.
Based on preliminary data, this cumulative BOP deficit reflected the trade in goods deficit, which was partly offset by inflows such as from personal remittances and the NG’s net foreign borrowings.[1]
The final gross international reserves (GIR) level was broadly unchanged at US$107.8 billion as of end-February 2022 from the comparable level in the previous month (US$107.69 billion).
The latest GIR level represents a more than adequate external liquidity buffer equivalent to 9.5 months’ worth of imports of goods and payments of services and primary income.[2]
Moreover, it is also about 7.1 times the country’s short-term external debt based on original maturity and 5.2 times based on residual maturity.[3]
[1] Based on the Philippine Statistics Authority’s (PSA) International Merchandise Trade Statistics (IMTS), the trade deficit for January 2022 reached US$4.7 billion, up from US$2.88 billion posted in the same period last year.
[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.
