BSP: PH balance of payments hits P7.263-billion deficit in 2022

The Philippines posted a historic balance of payments (BOP) deficit in 2022 as the country recorded a wider trade gap during the period, data released by the Bangko Sentral ng Pilipinas (BSP) on Thursday showed.

The central bank reported a BOP surplus of $612 million in December 2022, which compares with the $756-million deficit in November and the $991-million surplus in the same year of 2021.

This was, however, not enough to offset the deficits recorded in the previous months as the full-year BOP position stood at a deficit of $7.263 billion, reversing the $1.345-billion surplus recorded in 2021.

The BOP consists of Philippine transactions with the rest of the world during a specific period. A surplus means more funds entered the country, while a deficit means more funds left.

“The BOP surplus in December 2022 reflected inflows arising mainly from the BSP’s net foreign exchange operations and net income from its investments abroad,” it said in an accompanying statement.

The 2022 position is the first full-year deficit since 2018, and the biggest deficit in at least 22 years based on available data from the central bank.

“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 the increase in international commodity prices and resumption in domestic economic activities,” the BSP said.

Latest data available from the Philippine Statistics Authority (PSA) showed that the trade deficit widened to $3.677 billion in November 2022 from $3.312 billion the previous month.

Meanwhile, local inflation hit a fresh 14-year high of 8.1% in December, bringing the full-year average to 5.8%.

The latest BOP position reflects an increase in the country’s gross international reserves (GIR) to $96.1 billion, equivalent to 7.3 months’ worth of imports, 5.9 times the country’s short-term external debt based on original maturity, and 3.9 times based on residual maturity.

“The latest GIR level represents a more than adequate external liquidity buffer,” the BSP said. —NB, GMA Integrated News