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The trade deficit decreased in September.


THE PHILIPPINES’ overall bal

The balance of payments (BoP) position significantly decreased.fi

The central bank reported that the trade deficit significantly decreased to $414 million in September, compared to a $2.34-billion gap in the same month last year.

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The deficit widened for the sixth consecutive month in September, reaching its highest level since June’s $606 billion gap.

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The $57-million deficit expanded.ficit in August.

Philippines: Balance of Payments Position

The central bank stated that the BoP deficit in September 2023 was a result of net outflows primarily caused by the National Government’s payments towards its foreign currency debt.

The balance of payments (BoP) tracks a country’s financial interactions with other nations at a specific point in time. A deficit indicates that more money left the economy than came in, while a surplus indicates that more funds entered the Philippines.

During the nine-month period, the balance of payments for the Philippines shifted from a deficit of $7.83 billion in the same period of 2022 to a surplus of $1.74 billion.

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The BSP stated that the growth in personal remittances, trade in services, and foreign borrowings by the NG contributed to the overall increase.

According to the most recent report from the local statistics agency, the trade deficit for the country in August was $4.13 billion, which is less than the $4.2-billion gap reported in the previous month and the $6.03-billion deficit reported before that.fi

The year prior was cited.

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The trade deficit decreased to $36.31 billion from the $41.86 billion gap in the same period of 2022.

surplus must be balanced.”

Since the trade deficit is large, it is probable that the current account is in deficit. In order to balance the financial account, there must be a surplus.fl

According to Nicholas Antonio T. Mapa, a senior economist at ING Bank N.V. Manila, the recent increase in government bond issuances has probably caused a surplus in the Balance of Payments during the January-to-September period.   

The retail dollar bond issued by the government generated $1.26 billion in revenue.ff

Arriving in the latter part of September.

-leveraging process to
the final stages”

“The issuance of retail dollar bonds in the past month has aided in the completion of the de-leveraging process.”fi

Mr. Mapa stated that the city’s $414 million helped balance out the trade deficit.

As of the end of September, the balance of payments was…flected a fi

The current gross international reserve level is $98.1 billion, which is a decrease of 1.5% from the previous amount of $99.6 billion at the end of August.

The amount of dollar reserves was sufficient to pay off the country’s short-term external debt 5.7 times, based on its original maturity, and 3.6 times based on its remaining maturity.

This is also equal to 7.3 months’ worth of imports for goods and services, as well as primary income payments.

Having a sufficient amount of foreign exchange reserves helps protect an economy from fluctuations in the market and gives confidence in the country’s ability to repay debts during an economic downturn.

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According to Mr. Mapa, we can expect the current account to remain negative for the remainder of the year.

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The deficit amounted to $3.6 billion, equal to -3.4% of the country’s GDP, which was less than the $8 billion deficit from the previous year.

ifict to $1.2 billion

The current account deficit increased to $1.2 billion.ficit in the fi

In the first semester, there was a decrease of 4% of GDP, resulting in a reduction of 32.2% from the initial amount of $12.1 billion, now totaling $8.2 billion.fi

A deficit of -6.1% of GDP was recorded in the previous year’s corresponding period.

According to Mr. Mapa, there is a scheduled Sukuk issuance, but we have not received any further information on the timing.

The government intends to introduce Sukuk bonds by the end of November in hopes of collecting $1 billion through these Islamic bonds. The bonds will require a minimum investment of $200,000.

The BSP anticipates that the balance of payments for the country will conclude the year with a deficit of $127 million.ficit (0% of GDP). — Keisha B. Ta-asan