Philippines: BOP posts $123 million deficit in November

MANILA, Philippines — The country’s balance of payments (BOP) position reverted to a deficit in November as the national government paid more foreign obligations, according to the Bangko Sentral ng Pilipinas.

BSP data showed the Philippines incurred a BOP deficit of $123 million in November, a reversal of the $1.47 billion surplus recorded in the same period last year.

“The BOP deficit in November 2021 reflected outflows arising mainly from the national government’s foreign currency withdrawals from its deposits with the BSP as it settled its foreign currency debt obligations and paid for various expenditures,” the BSP said.

The BOP is the difference in total values between payments into and out of the country over a period. A deficit means more dollars flowed out of the country to pay for the importation of more goods, services and capital than what came in from exports, remittances from overseas Filipino workers (OFWs), business process outsourcing earnings and tourism receipts.

Notwithstanding the deficit last month, the BSP said the cumulative BOP level from January to November still ended in a surplus of $353 million. However, the latest figure was way below the $11.79 billion surplus recorded in the same 11-month period last year.

“Based on preliminary data, this cumulative BOP surplus reflected inflows, such as from personal remittances, trade in services, net foreign borrowings by the national government, and foreign direct investments, which were partly offset by a wider trade in goods deficit,” it said.

Personal remittances from OFWs went up by 5.4 percent to $28.82 billion from January to October compared to a year-ago level of $27.35 billion as cash remittances coursed through banks increased by 5.6 percent to $23.12 billion from $21.89 billion.

Likewise, the net inflow of foreign direct investments surged by 43.8 percent to $7.29 billion in the first three quarters from $5.02 billion a year ago.

As the country continues to borrow more from offshore and onshore creditors to finance the ballooning budget gap as well as its COVID-19 response measures, latest data from the Bureau of the Treasury showed the government’s outstanding debt grew by 19.4 percent to P11.97 trillion in October from P10 trillion in end-October last year.

Latest data from the Philippine Statistics Authority showed the country’s trade deficit swelled by 66 percent to $33.21 billion from January to October against last year’s $20 billion.