The asymmetry in the country’s balance of payments (BOP) narrowed in June to a deficit of only $606 million, lower than the $1.6 billion BOP deficit recorded in the same month last year.
According to the Bangko Sentral ng Pilipinas (BSP), the June deficit reflected outflows arising from the national government’s net foreign currency withdrawals from its deposits with the BSP to settle its foreign currency debt obligations and pay for its various expenditures.
Notwithstanding the deficit in June, the cumulative BOP position registered a surplus of $2.3 billion in the first half of the year. This is a reversal from the $3.1 billion deficit recorded in the same period a year ago.
Based on preliminary data, the cumulative six-month BOP surplus reflected inflows arising mainly from personal remittances, net foreign borrowings by the NG, trade in services, and foreign direct investments.
The gross international reserves (GIR) fell to only $99.4 billion as of end-June from $100.6 billion as of end-May.
At this level, the GIR 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, the BSP said.
It is also 5.7 times the country’s short-term external debt based on original maturity and 4.0 times based on residual maturity.
The global standard requires only three months’ worth of foreign currency reserves to service maturing debt and finance trade obligations.
