The country's balance of payment deficit in June worsened to $1.6 billion, higher than the $312 million recorded for June 2021 because of outflows from repaying the foreign currency denominated debts of the National Government.
The country’s overall balance of payments (BOP) position posted a deficit of $1.6 billion in June 2022, higher than the $312 million BOP deficit recorded in the same month last year, reflecting outflows arising from the National Government's payments of foreign currency-denominated debts.
Short-term debt based on residual maturity refers to outstanding external debt with original maturity of one year or less, plus principal payments on medium- and long-term loans of the public and private sectors falling due within the next 12 months.
The BOP deficit in June brought the BOP level for January-June 2022 to $3.1 billion deficit, higher than the $1.9 billion deficit recorded in the same period a year ago. Based on preliminary data, this cumulative BOP deficit reflected the widening trade in goods deficit.
The gross international reserves level slid to $100.9 billion as of end-June 2022 from $103.6 billion as of end-May 2022. Still, this GIR level is not worrisome as it is more than adequate external liquidity buffer equivalent to 8.4 months’ worth of imports of goods and payments of services and primary income. Moreover, it is also about 7.1 times the country’s short-term external debt based on original maturity and 4.5 times based on residual maturity.
The BSP said this level of GIR ensures the availability of foreign exchange to meet BOP financing needs such as payment for imports and debt servicing, in extreme conditions when there are no export earnings or foreign loans.
Preliminary data from the Philippine Statistics Authority International Merchandize trade showed a trade deficit from January to May of $24.9 billion, up from the $14.6 billion deficit posted in the same period last year.
Tags: #BOPdeficit, #NGdebts, #GIRdeclines, #economy