PH dollar position back to deficit in June
Payments made by the national government to foreign creditors flipped the Philippines’ dollar position back to a deficit in June, the Bangko Sentral ng Pilipinas (BSP) reported on Friday.
The country’s balance of payments (BOP) position posted a deficit of $155 million in June, a turnaround from the $2 billion surplus in May, data from the BSP showed.
The BOP summarizes an economy’s transactions with the rest of the world during a certain period.
A BOP surplus arises when more foreign funds enter the economy against those that leave, which may increase the country’s dollar resources that can be used to pay foreign debts and meet import requirements. A deficit means the reverse happened.
Despite the reversal, the June BOP gap was 74 percent smaller than the $606 million dollar deficit recorded in the same month last year.
But it nevertheless trimmed the six-month BOP surplus to $1.4 billion, albeit still close to the BSP’s full-year 2024 forecast of a $1.6 billion dollar windfall.
“The BOP deficit in June 2024 reflected outflows arising mainly from the National Government’s payments of its foreign currency debt obligations,” the central bank said.
But despite the return to a BOP deficit, figures showed the country’s gross international reserves went up to $105.2. billion in June, from $105 billion in May.
The BSP’s reserve assets consist of foreign investments, gold, foreign exchange, reserve position in the International Monetary Fund and special drawing rights.
