BSP data: September balance of payments deficit biggest in at least 19 months

The Philippines’ balance of payments (BOP) posted a deficit for the sixth straight month in September to mark the widest in at least 19 months, dragged by foreign exchange operations and payment of the government’s foreign debt.

Data released by the Bangko Sentral ng Pilipinas (BSP) indicated a $2.339-billion deficit in September, wider than the $572-million deficit in August and the $412-million deficit in September 2021.

This is also the biggest deficit recorded in 19 months, since February 2021 when the central bank reported a $2.019-billion deficit.

The BOP details the country's transactions with the rest of the world during a specific period. A deficit means more funds exited the country.

“The BOP deficit in September 2022 reflect outflows arising mainly from the Bangko Sentral ng Pilipinas’ net foreign exchange operations and the National Government’s payments of its foreign currency debt obligations,” the BSP said in an accompanying statement.

BSP Governor Felipe Medalla earlier this month said the central bank will not allow any excessive fluctuations in the foreign exchange rate, with the peso hitting an all-time low of P59:$1.

Meanwhile, the government’s running debt hit a fresh record high of P13.021 trillion as of August, due partly to the depreciation of the peso.

The latest figures brought the year-to-date BOP deficit to $7.8 billion, higher than the $665-million deficit recorded in the same period last year. The central bank expects a full-year deficit of $8.4 billion this year.

“Based on preliminary data, this cumulative BOP deficit reflected the widening trade in goods deficit as goods imports continued to surpass goods exports on the back of the persistent surge in international commodity prices and resumption in domestic economic activities,” the BSP said.

Data released by the Philippine Statistics Authority (PSA) last week showed that the Philippine trade gap stood at a record $6.002-billion deficit in August, 81.3% higher than the $3.310 billion the same month last year.

The BSP said the gross international reserves (GIR) level also declined to $93.0 billion in September from $97.4 billion in August, which the central bank said was a “more than adequate” external liquidity buffer.

This is equivalent to 7.4 months’ worth of imports of goods and payments of services and primary income, an is about 6.6 times the country’s short-term external debt based on original maturity and 4.0 times based on residual maturity. — RSJ, GMA News