Philippines’ balance of payments surplus slips to $609 million in 2024

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The central bank attributes the lower surplus to a higher trade deficit and net foreign borrowings by the national government

MANILA, Philippines – The Philippines posted a balance of payments (BOP) deficit of $1.5 billion in December 2024, reversing its $642 million surplus in the same period in 2023, the Bangko Sentral ng Pilipinas (BSP) said.

This brings the country’s cumulative BOP position to a $609 million surplus for the full-year 2024, lower than the $3.7 billion surplus in 2023.

The BSP said in a press statement that the December 2024 deficit reflected its net foreign exchange operations, as well as a drawdown on the national government’s deposits with the BSP to pay off foreign currency debt.

Data from the Bureau of the Treasury shows the Philippines’ national debt grew to P16.09 trillion as of end-December 2024 as the Philippine peso depreciated against the US dollar. This led to a P35.61 billion jump in the local valuation of debt in US dollars.

Meanwhile, the central bank attributes the lower surplus in 2024 to a higher trade deficit, lower net receipts from trade in services and net foreign borrowings by the national government.

“This decline was partially muted, however, by the continued net inflows from personal remittances, as well as net foreign portfolio and direct investments,” the BSP said.

The Philippines’ BOP position also reflects a drop in the country’s final gross international reserves (GIR) level to $106.3 billion. This is equivalent to 7.5 months’ worth of imports, as well as payments and primary income. The latest GIR level is also 3.7 times the country’s short-term external debt.

The BOP is a summary of a country’s transactions with the rest of the world over a period of time, while the GIR represents the BSP’s foreign assets, mostly held as investments in foreign-issued securities, foreign exchange and monetary gold.

For the BSP, an adequate GIR level can finance at least three months’ worth of the country’s imports, payments of services and primary income. Another indicator of a healthy GIR level is its ability to cover at least 100% of the country’s foreign debt payments due within the next 12-month period.  – Rappler.com