The country’s balance of payments (BOP) position posted a surplus of USD1.2 billion in the second quarter this year, a turnaround from a deficit of USD1.2 billion in Q2 2023. The reversal, the Bangko Sentral ng Pilipinas said, was due to significantly higher net inflows posted in the financial account, notwithstanding the increase in the current account deficit.
The current account deficit in Q2 2024 reached USD5.1 billion (equivalent to -4.6 percent of the country’s GDP), higher by 25 percent than the USD4.1 billion deficit (equivalent to -3.9 percent of the country’s GDP) posted in Q2 2023. This was driven by the expansion in the trade in goods gap and lower net receipts in trade in services. This was partly muted by higher net receipts in the primary and secondary income accounts.
The capital account recorded net receipts of USD18 million in Q2 2024, up by 15.4 percent from the USD15 million net receipts recorded in Q2 2023. This developed on account of the higher net receipts in the national government’s (NG) other capital transfers (at USD17 million from USD15 million).
The financial account recorded net inflows (or net borrowings by residents from the rest of the world) of USd5.3 billion in Q2 2024, notably higher than the USD204 million net inflows in Q2 2023. This outcome resulted from the reversal of the portfolio investment account to net inflows (from net outflows) and sustained net inflows in the direct and other investment accounts.
In the first six months, the BOP posted a surplus of USD1.4 billion, lower than the USD2.3 billion surplus recorded the year before. The BOP surplus in the first half reflected the sustained net inflows from the financial account.
The current account recorded a deficit of USD7.1 billion (equivalent to -3.2 percent of the country’s GDP) in January to June 2024, lower by 17.8 percent than the USD8.6 billion deficit (equivalent to -4.1 percent of the country’s GDP) in January to June 2023.
The lower current account deficit arose from the narrowing trade in goods deficit and the higher net receipts in the primary and secondary income accounts. However, this was partly mitigated by the lower net receipts in trade in services.
The capital account recorded net receipts amounting to USD34 million in the six months to June, which was 13.5 percent higher than the USD30 million net receipts recorded a year ago. This developed on account of the increase in net receipts in the NG’s other capital transfers (to USD34 million from USD30 million).
FThe financial account registered higher net inflows (or net borrowing by residents from the rest of the world) of USD10.5 billion in January to June 2024 when compared with the USD6.2 billion net inflows recorded in January to June 2023. This was driven by the reversal of the portfolio investment account from net outflows to net inflows. The expansion, however, was moderated by the lower net inflows registered in the other and direct investment accounts.
The country’s gross international reserves (GIR) rose to USD105.2 billion as of end-June 2024 from the USD99.4 billion level registered as of end-June 2023.
