go through Luisa Maria Jacinta C. Josen, Senior Reporter
Bangkok Sentral Ng Pilipinas (BSP) said on Monday that the country's payment balance (BOP) position fell to a $20 billion deficit in March.
Central Bank data shows that the BOP's deficit in March was $1.97 billion, a reversal from a $3.09 billion surplus in February and a $1.17 billion wasted in the same period a year ago.
BOP measures the country's transactions with the rest of the world. The deficit shows that the Philippines withdraws more funds, and a surplus means that more money is entering the country than the remaining funds.
“The BOP deficit reflects the reduction of the national government (NG) on its foreign currency deposits with BSPs to meet its foreign debt obligations as well as the net foreign exchange operations of BSPs,” the central bank said.
The latest data from BSP shows that the Philippines' outstanding foreign debt rose 9.8% to $137.63 billion as of the end of December 2024.
This brings the external debt-to-box office ratio to 29.8% by the end of 2024 from 28.7% at the end of 2023.
In the first quarter, the country's BOP positions accounted for a deficit of $2.96 billion, which also reversed from a $238 million surplus a year ago.
“According to preliminary data, the deficit at the beginning of the year mainly reflects the expanded trade of the commodity deficit,” BSP said.
The latest data from the local bureau of statistics shows that the retail sales deficit from January to February widened 4.6% from the $7.91 billion gap last year to $8.28 billion.
It added: “However, this decline has been partially in trouble due to the ongoing net inflows of individual remittances, FDI and foreign borrowing.”
BOP reflects the final position of the final international reserve (GIR) of $100.67 billion, which was below $107.4 million as of the end of February.
Nevertheless, BSP says the latest GIR provides a “strong external liquidity buffer.”
It added: “Specifically, the latest GIR level ensures that in extreme cases, the balance of payment financing needs such as payment for imports and debt, in extreme cases, in the absence of export gains or foreign loans.”
The US dollar reserves are sufficient to cover 3.6 times the short-term foreign debt of countries based on residual maturity.
It is also equivalent to the value of 7.4 months of payment for goods and services and the value of first-time income.
A large number of foreign exchange buffers keep the economy safe from market volatility, which is a guarantee of the country's ability to repay debts in a downturn.
John Paolo R. Rivera, a senior fellow at the Philippine Development Institute, said the shift toward a deficit stance was due to several factors, such as a higher trade deficit.
He also cites “BSP’s larger debt payments or Forex (Forex) operations to manage (PESO) volatility.”
“There is also an early inflow of borrowing, remittances or receipts related to investments in March,” Rivera said.
“This underscores the Philippines’ sensitivity to external stances on global market movements and domestic financing needs. Moving forward, careful management of external debt and trade competitiveness is crucial to maintaining external stability.”
This year, BSP expects the country's BOP stance to end with a $4 billion deficit, equivalent to -0.8% of GDP.
In 2024, the BOP position's surplus was US$609 million, and the surplus of US$36.72 billion at the end of 2023 was a drop of 83.4%.
