The country’s transactions with the rest of the world or balance of payments (BoP) shrank to $238 million as in the year to March from $3.5 billion a year ago, the Bangko Sentral ng Pilipinas said Friday.

The BSP said the payments surplus grew to $1.2 billion for March alone, although at a slower pace compared with the $1.3 billion seen in the same month a year ago.

However, the latest surplus data was a reversal of the $196 million deficit in February, the BSP’s data showed.

“Based on preliminary data, this cumulative BOP surplus reflected mainly the improvement in the balance of trade alongside the net inflows from personal remittances, net foreign borrowings by the national government, foreign direct investments, and foreign portfolio investments,” BSP said.

GIR reaches $104B

Accordingly, the country’s gross international reserves level rose to $104.1 billion as of end-March from $102.0 billion as of end-February.

The BSP said this amount is more than enough to cover 7.7 months’ worth of imports of goods and payments of services.

The lower surplus data came amid high global inflation rates and Russia-Ukraine and Israel-Hamas wars.

HSBC economist Aris Dacanay said the country will likely continue to see a relatively high deficit in terms of current account in the BOP which involves imports and exports.

“The government’s ambitious infrastructure agenda requires the importation of key inputs such as steel, cement, and technology,” he said.

“We do not expect current account deficits to go below 2 percent of GDP until 2025,” Dacanay continued.