BOP position in fourth quarter 2023 posts a higher surplus
The country’s balance of payments (BOP) position registered a surplus of $1.9 billion in the fourth quarter of 2023, more than thrice the $568 million surplus recorded in the fourth quarter of. The higher BOP surplus was supported by a significant increase in net inflows in the financial account.
Meanwhile, the current account registered a higher deficit in the fourth quarter of 2023.
The current account deficit in the fourth quarter of 2023 reached $520 million (equivalent to -0.4 percent of the country's GDP), higher by 942.0 percent than the $50 million deficit (equivalent to -0.04 percent of the country's GDP) posted in the fourth quarter of 2022. This development reflected the widening trade in goods deficit and the contraction of net receipts from trade in services, which outweighed the increase in net receipts in the primary and secondary income accounts.
The trade in goods deficit widened as the value of goods exports declined at a faster rate than that of imports. An estimated 81.4 percent of the drop in the exports value and 64.8 percent of the decrease in the imports value were driven by price changes.
The capital account recorded net receipts of $21 million in the last quarter of 2023, up by 26.4 percent from the $16 million net receipts recorded in the fourth quarter of 2022. This was on account of the net receipts from gross disposals of non-produced non-financial assets (e.g., patents, trademarks, and copyrights) amounting to $4 million in the fourth quarter of 2023 from $1 million net payments from gross acquisitions in the fourth quarter of 2022.
The financial account recorded net inflows (or net borrowings by residents from the rest of the world) of $6.4 billion in the fourth quarter 2023, higher by 208.5 percent than the $2.1 billion net inflows in the fourth quarter 2022. This was mainly on account of the reversal of the other investment account to net inflows (from net outflows) and higher net inflows in the portfolio investment account. Meanwhile, the direct investment account registered lower net inflows during the period.
The full-year 2023 BOP position posted a surplus of $3.7 billion, a turnaround from the $7.3 billion deficit recorded in 2022. The BOP surplus was driven by the contraction of the current account deficit along with the expansion of the financial account net inflows.
The current account recorded a deficit of $11.2 billion (equivalent to -2.6 percent of the country’s GDP) in 2023, lower by 38.6 percent than the $18.3 billion deficit (equivalent to -4.5 percent of the country’s GDP) in 2022. The lower current account deficit emanated from the narrowing trade in goods deficit, alongside the increase in net receipts from the trade in services and secondary income accounts. This was partly mitigated by the lower net receipts in the primary income account.
The trade in goods deficit narrowed as the contraction in the value of goods imports outpaced that of exports. An estimated 91.5 percent of the drop in the imports value and 92.6 percent of the decrease in exports value were due to price changes.
The capital account recorded higher net receipts amounting to $67 million in 2023 from $23 million in 2022. This was due mainly to net receipts from gross disposals of non-produced non-financial assets (e.g., patents, trademarks, and copyrights) of $2 million in 2023 from net payments of gross acquisitions of $51 million in 2022.
The financial account registered net inflows (or net borrowing by residents from the rest of the world) of $15.4 billion in 2023, higher by 11 percent than the $13.9 billion in 2022. This was due primarily to the surge in net inflows from the other investment account. This, however, was mitigated by the reversal of the portfolio investment account to net outflows and the decline in net inflows of direct investments.
Gross international reserves (GIR) amounted to $103.8 billion as of end-December 2023, higher than the $96.1 billion level registered as of end-December 2022.
The peso averaged P56.06/$1 in fourth quarter of 2023, appreciating by 2.4 percent from P57.39/$1 in the fourth quarter 2022. By contrast, the peso depreciated by 0.2 percent from P55.96/$1 in the third quarter of 2023. On a full-year basis, the peso depreciated by 2.1 percent to average P55.63/$1 in 2023 from P54.48/$1 in 2022. Bangko Sentral ng Pilipinas
