The balance of payments (BOP) position recorded a deficit of US$4.5 billion in the fourth quarter of 2024, a turnaround from a surplus of $1.9 billion in the fourth quarter of 2023. The shift to a BOP deficit was driven by the increase in current account deficit and reversal to net outflows in the financial account.

The current account deficit in the fourth quarter of 2024 reached $4.6 billion (equivalent to -3.5 percent of GDP), higher by 339.3 percent than $1 billion deficit (equivalent to -0.8 percent of GDP) in the fourth quarter of 2023.

The increased deficit was driven by a larger merchandise trade gap and lower net receipts in trade in services and primary income accounts. However, this was partially offset by higher net receipts in the secondary income account.

The capital account recorded net receipts of $19 million in fourth quarter of 2024, down 13.8 percent from $22 million in the fourth quarter of 2023. This developed due to lower net receipts from gross disposals of non-produced non-financial assets at $1 million from $4 million.

The financial account registered net outflows (or net lending by residents to the rest of the world) of $2.9 billion in the fourth quarter of 2024, a reversal from the $6.2 billion net inflows in the fourth quarter of 2023.

This was primarily driven by the shift of both the portfolio investment and other investment accounts from net inflows to net outflows. However, these outflows were partially tempered by the increased net inflows in the direct investment account.

The BOP position recorded a surplus of $609 million in 2024, lower than the $3.7 billion in 2023. The lower BOP surplus was driven by a larger current account deficit.

The current account deficit widened by 41.4 percent to $17.5 billion (equivalent to -3.8 percent of GDP) in 2024 from $12.4 billion (equivalent to -2.8 percent of GDP) in 2023. The higher current account deficit emanated from lower net receipts in trade in services and a higher deficit in trade in goods. However, this was offset partly by higher net receipts in the primary and secondary income accounts.

The capital account recorded net receipts amounting to $72 million in 2024, which was 2.9 percent lower than the $74 million recorded in 2023. This developed on the back of lower net receipts in the national government’s other capital transfers (at $67 million from $70 million).

The financial account posted $17.6 billion net inflows (or net borrowing by residents from the rest of the world) in 2024, higher by 29.6 percent than the $13.6 billion net inflows in 2023. This outcome was driven by the reversal of the portfolio investment account to net inflows (from net outflows) and higher net inflows in the direct investment account.

Gross international reserves (GIR) amounted to $106.3 billion as of end-2024. This is higher than the $103.8 billion level registered as of end-2023.

?In the fourth quarter of 2024, the peso averaged at P58.15/US$1, depreciating by 1.5 percent relative to an average of P57.25/US$1 in the third quarter of 2024.

Similarly, the peso depreciated year-on-year by 3.6 percent from an average of P56.06/$1 in the fourth quarter of 2023.

For the full year of 2024, the peso averaged P57.29/$1, reflecting a 2.9 percent depreciation from the 2023 average of P55.63/$1. Bangko Sentral ng Pilipinas