The balance of payments deficit amounts to $7.3 billion

Data for Bangko Sentral ng Pilipinas (BSP) on Thursday showed that the country’s overall balance of payments position hit a record deficit last year after a surplus in 2021.

The balance of payments deficit for the full year 2022 of $7.3 billion was the highest since 2000 based on the Bills Reconciliation Payment (BSP) figures. The previous peak was a gap of $2.858 billion in 2014.

A surplus of 1.34 billion pesos was recorded in 2021 after a record high of 16.22 billion dollars in the previous year.

Based on preliminary data, this [2022] BSP Bank said in a statement that the cumulative deficit in the balance of payments is due to the widening trade deficit in goods as commodity imports continued to exceed commodity exports on the back of the increase in international commodity prices and the resumption of domestic economic activities.

A surplus of $612 million was recorded in December alone, although it was down from $991 million in the previous year.

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“The balance of payments surplus in December 2022 reflects inflows arising mainly from Bangko Sentral ng Pilipinas’ net foreign exchange operations and net income from its investments abroad,” the central bank said.

The report also noted that December’s surplus reduced the full-year deficit from $7.9 billion at the end of November.

Meanwhile, total international reserves rose to $96.1 billion at the end of 2022 from $95.1 billion at the end of November.

It was said that the latest GIR level represents more than adequate external liquidity equivalent to 7.3 months of imports of goods and payments for services, and primary income.

Moreover, it was also about 5.9 times the country’s short-term external debt on the original maturity basis and 3.9 times on the remaining maturity basis.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said December’s gains were mainly driven by the seasonal increase in OFW remittances, exports, BPO revenue, foreign tourism revenue and other structural inflows during the holiday season.

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