The country’s BOP has posted a higher deficit of billions of U.S dollars in 2022 while the financial account registered net inflows in both quarters as well.
The balance of payments (BOP) deficit widened even more to $3.6 billion in the second quarter of 2022, reversing the $905 million surplus recorded in the same quarter last year.
BOP is the difference between all the money entering and exiting a country over a defined period and reflects the country’s economic health.
The reversal of the BOP position was caused by a larger current account deficit of $7.9 billion, which corresponds to -7.7 percent of the country's GDP in Q2 2022. It can be compared to a deficit of $1.3 billion, which is equivalent to -1.3 percent of the country's GDP in the same quarter in 2021.
The development for this 2nd quarter of 2022 is caused by the trade-in goods deficit widening, which was somewhat offset by a rise in net receipts in the main and secondary income accounts, as well as the trade-in services accounts.
Meanwhile, the financial account registered net inflows, or the net borrowing by residents from all over the world, amounts to $2.87 billion in Q2 2022 because of consistent inflows into the foreign direct and other investment accounts.
Q1 BOP Developments
In the first quarter of 2022 (January-June), the BOP position posted a higher deficit of $3.1 billion from the $1.9 billion deficit recorded in the same period last year.
Just like in Q2 2022, this was caused by an increase in the current account deficit because of a larger trade deficit.
Meanwhile, the financial account changed from net outflows to net inflows due to decreased net outflows of portfolio investments and stronger net inflows of other investments.
GIR and Exchange Rate
The country’s gross international reserves (GIR) amounted to $100.9 billion by the end of June, lower than the $105.8 billion from the comparable period last year.
Meanwhile, the exchange rate between dollar and pesos stood at P52.64 per $1 in Q2 2022.
The peso declined by 2.1 percent quarter on quarter, from an average of P51.53 per $1 in Q1 2022. Similarly, the peso fell by 8.5 percent from an average of P48.18 per $1 in Q2 2021.
Tags: #Economy, #BOP, #FinancialAccount, #ExchangeRate, #GIR