BOP surplus plunges to $609 million in 2024

MANILA, Philippines — The country’s balance of payments (BOP) surplus plunged to $609 million in 2024, a sharp 83.4-percent decline from the $3.67 billion excess recorded the previous year and falling significantly short of the $3.5-billion target set by the Bangko Sentral ng Pilipinas.

“Based on preliminary data, the decline in the cumulative BOP surplus was due to higher trade in goods deficit, and lower net receipts from trade in services and net foreign borrowings by the national government,” the BSP said.

However, the decline in BOP surplus was partly muted by the continued net inflows from personal remittances as well as net foreign portfolio and direct investments, the central bank said.

The BOP is a summary of the country’s economic transactions with the rest of the world for a specific period.

A surplus means more dollars flowed into the country from exports, remittances from overseas Filipino workers, business process outsourcing earnings and tourism receipts than what flowed out to pay for the importation of more goods, services and capital.

For December alone, the country posted a $1.5-billion BOP deficit – a reversal of the $642 million excess recorded in the same month in 2023.

“The BOP deficit in December 2024 reflected the BSP’s net foreign exchange operations and drawdown on the national government’s deposits with the BSP to pay off its foreign currency debt obligations,” the central bank said.

Latest data from the Philippine Statistics Authority showed the country’s trade deficit from January to November last year widened by 3.2 percent to $49.96 billion compared to the previous year’s $48.41 billion.

As of end-November last year, exports dipped by 0.4 percent to $67.551 billion from $67.833 billion in the same period in 2023, while imports went up by 1.1 percent to $117.51 billion from $116.25 billion.

Personal remittances also rose by three percent to $34.61 billion in end-November last year from $33.59 billion in the same period in 2023. Cash remittances coursed through banks rose by three percent to $31.11 billion.

The BOP position reflects a decrease in the final gross international reserves (GIR) level of $106.3 billion as of end-December 2024, two percent lower than the $108.5-billion level as of end-November last year.

The GIR level represents a more than adequate external liquidity buffer equivalent to 7.5 months’ worth of imports of goods and payments of services and primary income. It is also about 3.7 times the country’s short-term external debt based on residual maturity.