BOP swings to deficit in March

THE country's balance of payments (BOP) swung into a deficit in March, the Bangko Sentral ng Pilipinas (BSP) reported on Monday, reversing from surpluses posted a month and a year earlier.

The $2.0-billion shortfall was a turnabout from February's $3.1-billion surplus — the first in four months — and March 2024's $1.2 billion.

The result was due to the "national government's (NG) drawdowns on its foreign currency deposits with the Bangko Sentral ng Pilipinas (BSP) to meet its external debt obligations, as well as the BSP's net foreign exchange operations," the central bank said in a statement.

The BSP is aiming for a $2.1-billion BOP surplus this year. It missed the 2024 target of a $2.1-billion surplus, only netting $609 million.

The BOP is a summary of a country's transactions with the rest of the world for a specific period. It consists of the current account, which covers trade in goods, services and primary and secondary income (which includes overseas Filipino worker remittances); the capital account — capital transfers and nonfinancial assets — and the financial account or investments from abroad.

The cumulative count was still in deficit at $3.0 billion, also a reversal from the $238-million surplus recorded in the first quarter of 2024.

"Based on preliminary data, the year-to-date deficit reflected mainly the widening trade in goods deficit," the central bank said.

"This decline was partly muted, however, by the continued net inflows from personal remittances, foreign direct investments, and foreign borrowings by the NG," it added.

Meanwhile, the country's gross international reserves (GIR) also declined to $106.7 billion as of end-March 2025, down from $107.4 billion as of end-February 2025.

Despite the decline, the central bank said that the GIR level still represented "a robust external liquidity buffer, equivalent to 7.4 months' worth of imports of goods and payments of services and primary income."

"Additionally, it covers approximately 3.6 times the country's short-term external debt based on residual maturity," it added.

For 2025, the BSP has hiked its reserves projection to $110 billion from $107 billion.