Philippines posts $312 million balance of payments deficit in June


Posted at Jul 27 2021 03:24 PM

MANILA - The Philippines posted a $312 million balance of payments deficit at the end of June, the Bangko Sentral ng Pilipinas said on Tuesday. 
This was a reversal from the $80 million BOP surplus recorded in the same month last year, the BSP said. 

"The BOP deficit in June 2021 reflected mainly the outflows arising from the foreign currency withdrawals of the National Government from its deposits with the BSP as the NG settled its foreign currency debt obligations and paid for various expenditures, and the BSP’s net foreign exchange operations," the BSP said. 

These were partly offset, however, by the inflows from the BSP’s income from its investments abroad, the central bank added. 

The June deficit pushed the cumulative BOP deficit for the first half of the year to $1.94 billion, a reversal of the $4.11 billion surplus recorded in the same period a year ago. 

"Based on preliminary data, this cumulative BOP deficit was partly attributed to a wider merchandise trade deficit," the BSP said. 

The deficit also meant a decrease in the country's gross international reserves level to $105.76 billion as of end-June 2021 from $107.25 billion as of end-May 2021. This was also down from $110.12 billion at the beginning of the year. 

"The latest GIR level represents a more than adequate external liquidity buffer equivalent to 12 months’ worth of imports of goods and payments of services and primary income. Moreover, it is also about 7.7 times the country’s short-term external debt based on original maturity and 5.1 times based on residual maturity," the BSP said. 

Fitch Ratings earlier said the Philippines' external finances remain a credit strength, with foreign-currency reserves remaining high and gross external debt levels staying manageable.