BoP deficit reaches $73 million in March

PHILIPPINE STAR/ EDD GUMBAN

THE country’s balance of payments (BoP) stood at a deficit for the third straight month in March as the National Government continued to pay its dollar obligations, according to the Bangko Sentral ng Pilipinas (BSP).

The BoP posted a deficit of $73 million in March, reversing the $448-million surplus a year earlier, based on data released by the central bank on Thursday. It was, however, 96% smaller than the $2.019-billion deficit recorded in February.

“The BoP deficit in March 2021 reflected outflows arising mainly from the National Government’s net withdrawal of its foreign currency deposits with the BSP, which were largely used for debt servicing,” the BSP said.

In the first quarter, BoP posted a $2.844-billion gap, surging from the $68-million deficit during the same period in 2020.

The BoP shows a glimpse of the country’s transactions with the rest of the world. A deficit means more funds fled the country, while a surplus shows that more money came in.

The March BoP position reflects gross international reserves worth $104.48 billion, 0.64% lower than the $105.16 billion as of end-February.

This end-March dollar reserves level is enough to shield the economy against external shocks, as it is equivalent to 12 months’ worth of imports of goods and payments of services and primary income, the BSP said.

“It is also about 7.3 times the country’s short-term external debt based on original maturity and 5.2 times based on residual maturity,” it added.

The extension of the strict lockdown measures, which could slow economic activities and imports, may affect BoP in the coming months, Rizal Commercial Banking Corp. Michael L. Ricafort said in a text message.

President Rodrigo R. Duterte on Wednesday night said Metro Manila, Bulacan, Rizal, Laguna, and Cavite will remain under modified enhanced community quarantine (MECQ) until May 14.

Meanwhile, latest data from the Philippine Statistics Authority showed the trade deficit stood at $2.29 billion in February, as exports declined 2.3% to $5.31 billion while imports rose 2.7% to $7.6 billion.

The central bank projects the BoP to post a $6.2-billion surplus this year, equivalent to 1.6% of the economy.

Last year, the BoP reached a record surplus of $16 billion due to the rise in foreign debt and a slump in imports. — Luz Wendy T. Noble