Philippines posted $1.4 billion BOP surplus in first half

The country's balance of payments (BOP) position recorded a lower deficit in June this year, the Bangko Sentral ng Pilipinas (BSP) said.

Data released by the BSP on Friday showed that the BOP in June posted a deficit of USD155 million, down from the USD606 million deficit in June 2023.

"The BOP deficit in June 2024 reflected outflows arising mainly from the National Government’s (NG) payments of its foreign currency debt obligations," the BSP said.

The BOP is a summary of the economic transactions of a country with the rest of the world for a specific period, according to a report by Philippine News Agency.

The overall position can be in surplus, deficit or balance.

For the first half of the year, the BSP said preliminary data showed that the BOP position registered a surplus of USD1.4 billion, lower than the USD2.3 billion surplus recorded in January to June 2023.

The BSP said the cumulative BOP surplus reflected mainly the narrowing trade in goods deficit alongside the continued net inflows from personal remittances, trade in services, net foreign direct investments, net foreign borrowings by the NG, and net foreign portfolio investments.

Recent data from the Philippine Statistics Authority, the trade deficit for January-May 2024 reached USD20.6 billion, down from the USD23.7 billion deficit posted in January-May 2023.

The BSP, meanwhile, said the gross international reserves (GIR) level increased to USD105.2 billion as of end-June 2024 from USD105.0 billion as of end-May 2024.

"The latest GIR level represents a more than adequate external liquidity buffer equivalent to 7.7 months’ worth of imports of goods and payments of services and primary income," the BSP said.

It is also about six times the country’s short-term external debt based on original maturity and 3.8 times based on residual maturity.