THE PHILIPPINES’ balance of payments (BoP) position stood at a $1.345-billion surplus in 2021, its smallest since 2008, due to a wider trade deficit, according to the central bank.

Data released by the Bangko Sentral ng Pilipinas (BSP) on Tuesday evening showed last year’s BoP surplus was significantly smaller than the $16.022-billion surfeit seen in 2020, and below the projected $1.6-billion surplus for 2021.

Last year’s BoP surplus was also the lowest since the $89-million surplus in 2008.

For December alone, the payment position stood at a $991-million surplus, much lower than $4.236 billion a year earlier and a turnaround from a deifict worth $123 million in November.

“In December 2021,… [the] BoP surplus…reflected the structural inflows for the year, such as the BSP’s income from its investments abroad, personal remittances, trade in services, foreign direct investments, and net foreign borrowings by the National Government (NG),” the BSP said in a statement.

“However, these inflows were moderated by a wider trade in goods deficit,” it added.

The BoP reflects the end-December gross international reserves worth $108.79 billion, 0.89% lower than $107.82 billion as of end-November.

At this level, the country’s dollar reserves were enough to cover 10.3 months’ worth of imports of goods and payments of services and primary income. It was also equivalent to 8.7 times the country’s short-term external debt based on original maturity and 5.8 times based on residual maturity.

The BoP gives a glimpse into the country’s transactions with the rest of the world. A deficit means more funds left the country, while a surplus shows that more money came in.

“The smaller 2021 BoP surplus was caused by the wider trade deficit. The pre-pandemic level of import growth supported the bigger trade balance for 2021,” UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in an e-mail.

Latest data from the Philippine Statistics Authority showed the trade balance had ballooned to a $37.92-billion deficit as of end-November, bigger than the $22.15-billion trade gap in 2020’s comparable 11 months.

“The reopening of the local economy and improving levels of infections encouraged domestic demand toward the last quarter of 2021, while exports slowed further due to the softening recovery growth of our trading partners, particularly that of the biggest one, China,” Mr. Asuncion said.

He said the BoP is likely to post a slimmer surplus or even a deficit on prospects of economic recovery that will be supported by domestic demand. Mr. Asuncion said the peso could weaken versus the greenback as a result.

The peso closed at P50.999 a dollar on Dec. 31, 6.2% weaker than its P48.023 finish a year earlier.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said an improvement in global vaccination rates would likely lift the economic outlook.

“This could in turn support increased recurring dollar flows into the country such as remittances, business process outsourcing revenues, and foreign investments. There could also be some pickup in foreign tourism receipts if fully vaccinated people would be allowed greater mobility,” he said in a Viber message.

The BSP expects the BoP to post a surplus worth $700 million this year, equivalent to 0.2% of the gross domestic product. — Luz Wendy T. Noble