An economist said on Wednesday that the country’s overall balance of payments could improve with the expected seasonal increase in the country’s structural inflows.
Michael Ricafort, Rizal Commercial Banking Corp. gave this statement in a report after the Bangko Sentral ng Pilipinas said that the country’s BoP position posted a deficit of $756 million in November 2022, higher than the $123 million BoP deficit recorded in the same month last year.
“Continued growth in OFW remittances and BPO revenues, especially the seasonal increase expected in December, would help offset/make up for the wider trade deficits seen in recent months,” Ricafort said.
He mentioned in the same report that the country’s BOP deficit on a monthly basis still hovered among the narrowest levels in seven months.
He added that the levels have already been made manifest in the narrowing of the trade deficit and net imports recently.
Foreign currency debt obligations
Meanwhile, the BSP said that the BoP deficit in November 2022 reflected outflows arising mainly from the National Government’s payments of its foreign currency debt obligations and the BSP’s net foreign exchange operations.
“Based on preliminary data, this cumulative BoP deficit was due to the widening trade in goods deficit as goods imports continued to surpass goods exports on the back of an increase in international commodity prices and resumption in domestic economic activities,” the BSP explained.
The BoP deficit in November brought the current year-to-date BOP level to a US$7.9 billion deficit, a reversal from the US$353 million surplus recorded in the same period a year ago.
The BSP said gross international reserves increased to $95.1 billion as of end-November 2022 from $94.0 billion in end-October 2022.
Nonetheless, the latest GIR level represents a more than adequate external liquidity buffer equivalent to 7.2 months’ worth of imports of goods and payments of services and primary income.
It is also about 5.8 times the country’s short-term external debt based on original maturity and 3.8 times on residual maturity.