By Luisa Maria Jacinta C. Jocson, Reporter
THE PHILIPPINES in January posted its largest steadiness of funds (BoP) deficit in over a decade, preliminary knowledge from the Bangko Sentral ng Pilipinas (BSP) confirmed.
The BoP deficit stood at $4.1 billion in January, ballooning from the $740-million hole in the identical month a 12 months in the past.
It was additionally almost triple the $1.5-billion deficit posted in December.
This marked the widest BoP deficit in 11 years or because the $4.48-billion shortfall in January 2014.
The BoP summarizes the nation’s transactions with the remainder of the world. A deficit means extra funds left the nation, whereas a surplus exhibits that more cash got here in.
“The BoP deficit in January 2025 mirrored the BSP’s internet overseas change operations and drawdowns by the Nationwide Authorities (NG) on its overseas forex deposits with the BSP to fulfill its exterior debt obligations,” the central financial institution mentioned.
Newest knowledge from the Bureau of the Treasury confirmed the NG’s excellent debt hit P16.05 trillion on the finish of 2024, up by 9.8% from P14.62 trillion at end-2023.
Earlier BSP knowledge confirmed the nation’s excellent exterior debt hit a report excessive of $139.64 billion as of end-September. This introduced the exterior debt-to-GDP ratio to 30.6% on the finish of the third quarter.
The exterior debt service burden jumped by 14% to $15.735 billion within the 11-month interval, in line with the most recent central financial institution knowledge.
Michael L. Ricafort, chief economist at Rizal Business Banking Corp., mentioned the broader BoP deficit was additionally because of the latest peso volatility.
The peso depreciated to P58.365 at end-January, weaker by 52 centavos from the P57.845 end at end-December.
“The BoP deficit for January is primarily attributable to curiosity and debt funds, which can be thought of as overseas change intervention by the central financial institution to keep up the Philippine peso’s stability towards the US greenback,” Oikonomia Advisory and Analysis, Inc. economist Reinielle Matt M. Erece mentioned.
“This entails massive withdrawals of the nation’s money reserves to pay its obligations and meet its targets,” he added.
At its end-January place, the BoP displays a gross worldwide reserve (GIR) stage of $103.3 billion, down by 2.8% from $106.3 billion as of end-2024.
Mr. Ricafort mentioned the comparatively larger GIR offered “higher cushion for the peso change charge vs. the US greenback.”
This was supported by the “continued progress within the nation’s structural US greenback inflows particularly from abroad Filipino employee remittances, enterprise course of outsourcing revenues, overseas tourism receipts and overseas investments, amongst others.”
Regardless of the decline, the greenback buffer is sufficient to pay for 7.3 months’ price of imports of products and funds of providers and first earnings.
The reserves can even cowl about 3.7 occasions the nation’s short-term exterior debt based mostly on residual maturity.
For the approaching months, the BoP place might enhance because of the NG’s newest world bond issuance, Mr. Ricafort mentioned.
The Philippines raised $3.3 billion from the sale of dual-tranche US-dollar world bonds, in addition to a euro sustainability bond, in late January.
In 2024, the nation’s full-year BoP place stood at a surplus of $609 million, falling by 83.4% from the $3.672-billion surplus at end-2023.
This 12 months, the BSP expects a $2.1-billion surplus place, equal to 0.4% of financial output.
