BOP posts US$612 million surplus in December 2022

The country’s overall balance of payments (BOP) position posted a surplus of US$612 million in December 2022 albeit lower than the US$991 million BOP surplus recorded in the same month last year.

The BOP surplus in December 2022 reflected inflows arising mainly from the Bangko Sentral ng Pilipinas’ (BSP) net foreign exchange operations and net income from its investments abroad.

Meanwhile, the BOP surplus in December reduced the full-year 2022 BOP deficit to US$7.3 billion from a deficit of US$7.9 billion in January to November 2022. Nonetheless, the full-year 2022 BOP deficit was a reversal from the US$1.3 billion surplus recorded in 2021.

Based on preliminary data, this cumulative BOP deficit was due to the widening trade in goods deficit as goods imports continued to surpass goods exports on the back of the increase in international commodity prices and resumption in domestic economic activities.[1]

The gross international reserves (GIR) level increased to US$96.1 billion as of end-December 2022 from US$95.1 billion as of end-November 2022.

The latest GIR level represents a more than adequate external liquidity buffer equivalent to 7.3 months’ worth of imports of goods and payments of services and primary income.[2] Moreover, it is also about 5.9 times the country’s short-term external debt based on original maturity and 3.9 times based on residual maturity.[3]

[1] Based on preliminary data from the Philippine Statistics Authority’s (PSA) International Merchandise Trade Statistics (IMTS), the trade deficit for January-November 2022 reached US$53.7 billion, up from the
US$37.1 billion deficit 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.