The country’s balance of payments (BOP) position surged to a surplus of USD3.7 billion in the third quarter of 2024, a sharp recovery from the USD524 million deficit recorded in the same period last year. This essentially means the Philippines gained far more foreign currency denominated assets than it lost during the period. The turnaround, the Bangko Sentral ng Pilipinas (BSP) said, was largely driven by a significant rise in net inflows in the financial account, despite a wider deficit in the current account.
The current account deficit widened to USD5.7 billion in 3Q 2024, up 154.4 percent from the USD2.2 billion shortfall in 3Q 2023, equivalent to -5.2 percent of local output or the gross domestic product (GDP). The increase was primarily due to a larger trade deficit in goods, and lower receipts in trade services and primary income. However, higher secondary income receipts helped temper the impact.
In contrast, the financial account showed a robust performance, posting net inflows of USD10.5 billion in 3Q 2024, a sharp improvement from USD2.0 billion in the same quarter of 2023. This positive shift was driven by the reversal of portfolio investments from net outflows to inflows, alongside higher net inflows in direct and other investments.
For the January–September 2024 period, the BOP position recorded a surplus of USD5.1 billion, up from USD1.7 billion in 2023, underpinned by stronger financial account inflows. However, the current account deficit deepened by 19.3 percent to USD12.9 billion, as net receipts from trade in services remained subdued.
The capital account showed a slight improvement, with net receipts totaling USD54 million for the first nine months of the year, a 15.6 percent increase from 2023, thanks to higher capital transfers from the national government.
Meanwhile, the country’s gross international reserves (GIR) reached USD112.7 billion by the end of September 2024, up from USD98.1 billion a year earlier, providing a strong buffer against external shocks.
The peso averaged P57.25 per US dollar in Q3 2024, showing a slight appreciation from the previous quarter but a 2.3 percent depreciation from the same period last year. For the year-to-date, the peso depreciated by 2.7 percent, averaging P57.00 per US dollar from January to September 2024.
The BSP’s strong oversight of the financial account continues to play a key role in stabilizing the nation’s BOP, despite ongoing global challenges.
