June 2021 BOP Posts a US$312 Million Deficit, GIR as of end-June 2021 Settles at US$105.76 Billion

​The country's overall balance of payments (BOP) position posted a deficit of US$312 million in June 2021, a reversal from the US$80 million BOP surplus recorded in the same month last year. The BOP deficit in June 2021 reflected mainly the outflows arising from the foreign currency withdrawals of the National Government (NG) from its deposits with the BSP as the NG settled its foreign currency debt obligations and paid for various expenditures, and the BSP's net foreign exchange operations. These were partly offset, however, by the inflows from the BSP's income from its investments abroad.

The cumulative BOP position for the period January-June 2021 registered a deficit of US$1.94 billion, a reversal of the US$4.11 billion surplus recorded in the same period a year ago. Based on preliminary data, this cumulative BOP deficit was partly attributed to a wider merchandise trade deficit.¹

The BOP position reflects a decrease in the final gross international reserves (GIR) level to US$105.76 billion as of end-June 2021 from US$107.25 billion as of end-May 2021, and from US$110.12 billion at the beginning of the year. The latest GIR level represents a more than adequate external liquidity buffer equivalent to 12 months' worth of imports of goods and payments of services and primary income.² Moreover, it is also about 7.7 times the country's short-term external debt based on original maturity and 5.1 times based on residual maturity.³

-----------------------------------

¹Based on the Philippine Statistics Authority's (PSA) International Merchandise Trade Statistics, the trade balance for
January-May 2021 reached US$14.18 billion, up from US$9.95 billion deficit posted in the same period last year.
² Specifically, it ensures availability of foreign exchange to meet balance of payments financing needs, such as for payment of imports and debt service, in extreme conditions when there are no export earnings or foreign loans.
³Short-term debt based on residual maturity refers to outstanding external debt with original maturity of one year or less, plus principal payments on medium- and long-term loans of the public and private sectors falling due within the next 12 months.

View Table