GOVERNMENT debt payments swung the country's balance of payments (BoP) position into a deficit in June, the Bangko Sentral ng Pilipinas (BSP) reported on Friday.

Last month's $155-million shortfall reversed from May's $2.0-billion surplus but was lower than the $606-million deficit a year earlier.

The result "reflected outflows arising mainly from the national government's (NG) payments of its foreign currency debt obligations," the central bank said in a statement.

Year to date, the BoP position remained at a surplus to $1.4 billion but was lower than the $2.3 billion recorded in January-June 2023.

This was mainly due to "narrowing trade in goods deficit alongside the continued net inflows from personal remittances, trade in services, net foreign direct investments, net foreign borrowings by the NG and net foreign portfolio investments," the BSP said.

The country's gross international reserves (GIR), meanwhile, increased to $105.2 billion as of end-June from $105.0 billion a month earlier, the central bank also reported.

The level was said to represent "a more than adequate external liquidity buffer equivalent to 7.7 months' worth of imports of goods and payments of services and primary income."

"It is also about 6.0 times the country's short-term external debt based on original maturity and 3.8 times based on residual maturity," the BSP added.

Sought for comment, Security Bank Corp. chief economist Robert Dan Roces said the mixed BoP picture of a June deficit and a first-half surplus was due to "a narrowing trade gap and continued foreign inflows."

"The healthy GIR level provides a buffer. While the June deficit is a slight concern, the overall 2024 trend is cautiously optimistic, and we may be in a small surplus by the end of the year," he added.

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