The country’s balance of payments (BoP) hit an over two-year high shortfall of $2.01 billion in February, according to the Bangko Sentral ng Pilipinas (BSP).
Central bank data released on Friday showed that the amount was bigger than the $752-million gap in January, and a reversal of the $839 million in February 2020.
It was also the widest since September 2018, when the payments position amounted to a deficit of $2.69 billion.
The BoP is a record of all trade and financial transactions made between entities in one country and the rest of the world in a given period.
A gap occurs when the country imports more goods, services and capital than it exports; a surplus, when it exports more than it imports.
In a statement, the Bangko Sentral said the February gap “reflected outflows, arising mainly from the BSP’s reserves management operations and the foreign currency withdrawals of the national government (NG) from its deposits with the BSP as payment for its foreign currency debt obligations.”
But the outflows, the central bank added, were partly offset by inflows from its foreign-exchange operations and income from investments abroad.
The latest monthly figure increased the shortfall to $2.77 billion in the first two months of the year, rising from the $516 million deficit during the same period in 2020.
“Based on preliminary data, this cumulative BoP deficit was due largely to the NG’s net repayments of its foreign loans and the country’s merchandise trade deficit,” the Bangko Sentral said.
Latest data from the Philippine Statistics Authority showed that the country’s trade shortfall slid to $16.1 billion in the first nine months of 2020 from $30.5 billion in the same period last year.
The BSP estimates the payments balance position to post a $6.2-billion surplus this year as it expects higher current account surplus on account of the anticipated broad-based recovery in both goods and services trade amid expectations of a vaccine-backed and policy-supported resumption of global and domestic economic activities this year.
The BoP position reflected the final gross international reserves level of $105.16 billion as of the end of February.
This level “represents a more than adequate external liquidity buffer, which can cushion the domestic economy against external shocks,” the central bank said.
The final GIR is equivalent to 12 months’ worth of imports of goods and payments of services and primary income. It is also about 7.5 times the country’s short-term external debt based on original maturity and 5.2 times based on residual maturity.