The country’s overall balance of payments (BOP) position posted a surplus of US$711 million in October 2022, albeit lower than the US$1.1 billion BOP surplus recorded in the same month last year.
The BOP surplus for the month reduced the cumulative BOP deficit in January-October 2022 to US$7.1 billion from a deficit of US$7.8 billion in the first three quarters of the year.
The BOP surplus in October 2022 reflected inflows arising mainly from the National Government’s net foreign currency deposits with the Bangko Sentral ng Pilipinas.[1]
Meanwhile, the current year-to-date BOP level, which is a reversal from the US$476 million surplus recorded in the same period a year ago, reflected the widening trade in goods deficit as goods imports continued to surpass goods exports on the back of the persistent surge in international commodity prices and resumption in domestic economic activities.[2]
The gross international reserves (GIR) level increased to US$94.0 billion as of end-October 2022 from US$93.0 billion as of end-September 2022. The latest GIR level represents a more than adequate external liquidity buffer equivalent to 7.5 months’ worth of imports of goods and payments of services and primary income.[3] Moreover, it is also about 6.9 times the country’s short-term external debt based on original maturity and 4.1 times based on residual maturity.[4]
[1] The said net deposits include proceeds from the issuance of ROP Global Bonds amounting to US$2.0 billion for the NG’s general financing and operational requirements.
[2] Based on preliminary data from the Philippine Statistics Authority’s (PSA) International Merchandise Trade Statistics (IMTS), the trade deficit for January-September 2022 reached US$46.7 billion, up from the
US$28.6 billion deficit posted in the same period last year.
[3] 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.
[4] 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.
