PH Posted a USD639-M Deficit in April BSP Reports

The latest report by the Bangko Sentral ng Pilipinas (BSP) revealed that the country’s balance of payments (BOP) deficit of USD639 million in April this year.

According to BSP, this year’s deficit is said to be USD148 million more than in April 2023.

What is a BOP? It is a financial statement of a country that shows all its transactions with the rest of the world over a certain period.

This April 2024, the country posted a BOP deficit meaning that the Philippines is sending out money rather than receiving it.

BSP said that the deficit is mainly caused by the government withdrawing foreign currencies from its accounts to pay off international debts and cover expenses.

Meanwhile, fewer imports from January to March 2024 also affected the country’s BOP. However, during the said period the trade deficit was only USD11.2 billion, an improvement compared to USD14.5 billion in the same period last year.

Moreover, BSP also said that the country’s gross international reserves (GIR) also fell to USD102.6 billion in April 2024 from $104.1 billion at the end of March of the same year.

However, BSP said this is still a healthy amount, enough to cover 7.6 months of imports and payments for services and primary income.

Despite the deficit experienced in April, Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said in a PNA article that the situation could improve in the next few months.

“For the coming months, BOP data could still improve with the continued growth in the country’s structural inflows as the economy reopens further towards greater normalcy, in terms of the continued year-on-year growth OFW (overseas Filipino workers) remittances, Business Process Outsourcing revenues, export revenues, and foreign tourism receipts,” Ricafort said. (ASC)