THE country’s overall balance of payments (BOP) posted a deficit of $606 million in June 2023, lower than the $1.6 billion recorded in the same month last year, data from the Bangko Sentral ng Pilipinas (BSP) showed. The narrower deficit was traced by one expert to higher remittances, tourist receipts and BPO revenues.
In a statement, the central bank said the BOP deficit in June 2023 reflected outflows arising mainly from the national government’s (NG) 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 semester of the year,” the BSP said.
“This level is a reversal from the $3.1-billion deficit recorded in the same period a year ago,” it added.
Based on preliminary data, the cumulative BOP surplus reflected inflows that stemmed mainly from personal remittances, net foreign borrowings by the NG, trade in services, and foreign direct investments.
“The gross international reserves [GIR] level decreased to $99.4 billion as of end-June 2023 from $100.6 billion as of end-May 2023,” the central bank said.
Meanwhile, the latest GIR level 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.
Moreover, it is also about 5.7 times the country’s short-term external debt based on original maturity and 4.0 times based on residual maturity.
Domini Velasquez, chief economist of China Banking Corp. said that the country’s BOP continues to be helped by smaller merchandise trade deficit.
“Additionally, exports of services have jumped from a year ago, helping lift the current account in a period of lackluster global trade. Remittances prove to be resilient also due to better economic conditions in host countries and declining inflation rates across the world,” she said.
Velasquez added that “at the current rate, it looks like the BOP would outperform the BSP’s recent projection of a $1.2-billion deficit.”
“Moving forward, we expect the trade deficit to remain relatively narrow [compared with last year] given the price impact of more moderate commodity prices on imports and possible export recovery toward end of the year,” she said.
Michael Enriquez, Sun Life Investment Management and Trust Corp. (SLIMTIC) president and chief investment officer, said that “the narrower deficit was a result of higher OFW remittances, BPO revenues and tourist receipts over the last few months.”
“We also saw some net foreign direct investments and lower imports due to lower oil prices,” he added.
Image credits: Michael Edwards | Dreamstime.com
BOP deficit narrows to $606M in June–BSP
Source: News Paper Radio
0 Comments