The Philippines spent far more of its foreign currency assets than it earned them in September, resulting in an overall balance of payments (BOP) deficit of USD414 million in September.
According to the Bangko Sentral ng Pilipinas (BSP), this was lower than the USD2.3 billion BOP deficit recorded in the same month last year.
The BSP traced the imbalance in September to net outflows arising from the national government (NG) making payments on its foreign currency debt obligations.
Nevertheless, the cumulative BOP position registered a surplus of USD1.7 billion in the first three quarters of the year or a reversal from the USD7.8 billion deficit recorded in the same period a year ago.
Based on preliminary data, this development reflected mainly the improvement in the balance of trade and the higher net inflows from personal remittances, trade in services, and foreign borrowings by the NG. The gross international reserves (GIR) level decreased to USD98.1 billion as of end-September 2023 from USD99.6 billion as of end-August 2023.
The 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.
It is also about 5.7 times the country’s short-term external debt based on original maturity and 3.6 times based on residual maturity.
