More dollars flowed out of PH in Oct, gov’t debt repayments trimmed reserves

Dollars flowing out of the Philippine economy in October exceeded inflows during the same period resulting in a $724-million deficit in the country’s balance of payments tally, the central bank said.

In a statement, the BSP said this development was a reversal of the $1.5-billion surplus seen in the same month last year.

The decline primarily reflects the national government’s foreign currency withdrawals to settle debt obligations and finance expenditures.

The October deficit marks a turnaround but is cushioned by a cumulative surplus of $4.4 billion in the first 10 months of 2024. This figure surpasses the $3.2-billion surplus recorded for the same period in 2023, bolstered by continued inflows from personal remittances, trade in services, and net foreign borrowings.

Contributions from foreign direct and portfolio investments further supported the year-to-date surplus.

Despite the October shortfall, the country’s dollar reserves held by the central bank stood at $111.1 billion at the end of October, down slightly from $112.7 billion in September.

This dollar reserves level remains robust, equivalent to eight months of imports and 4.4 times the country’s short-term external debt based on residual maturity, the BSP said.

It emphasized that the dollar reserves level provides adequate external liquidity buffer, ensuring the country can meet payment obligations in adverse conditions.