Philippines’ balance of payments deficit grows to $2.6 billion in April

MANILA, Philippines – The Philippines’ balance of payments (BOP) deficit ballooned to $2.6 billion in April amid the country’s growing trade deficit, data from the Bangko Sentral ng Pilipinas (BSP) showed.

According to the monetary authority, the $2.6 billion BOP deficit is higher than the $639 million deficit in April 2024. On a month-on-month basis, the deficit widened from March’s $1.97 billion.

This brings the country’s cumulative BOP level to a $5.5 billion deficit, more than double the $401 million deficit recorded in the same period last year.

The BSP said the deficit reflected the Philippines’ widening trade gap as imports jumped 11.9%. Data from the Philippine Statistics Authority (PSA) show that the Philippines had a $4.1 billion trade deficit in March, which means the country imported more products than it exported.

“This decline was partly muted, however, by the continued net inflows from personal remittances from overseas Filipinos and foreign borrowings by the [National Government],” the BSP said.

A country’s BOP summarizes the country’s transactions with the rest of the world. A BOP deficit means that the Philippines shelled out more funds in a particular month.

The BSP added that the BOP deficit also reflects the lower gross international reserves (GIR) levels, which dropped from $106.7 billion in March to $105.3 billion in April. According to the monetary authority, this reflects the national government’s drawdown on currency deposits to service its debt and the BSP’s net foreign exchange operations.

Despite the decrease in GIR levels, the BSP said the amount can cover 7.2 months’ worth of imports, service payments and primary income. It can also cover 3.6 times the Philippines’ short-term external debt obligations. – Rappler.com