BoP surplus shrinks to $448M in March
THE country’s balance of payments (BoP) position posted a $448-million surplus in March, lower than the figure a month and a year earlier, Bangko Sentral ng Pilipinas (BSP) data showed on Tuesday.
According to the data, the amount was narrower than the $839 million and $627 million and surpluses in February and in March 2019.
In a statement, the central bank said the March surplus “reflected mainly the inflows arising from the BSP’s foreign exchange operations, as well as income from its investments abroad, and the national government’s foreign currency deposits with the BSP.”
“These inflows were partially offset, however, by the foreign currency withdrawals made by the national government to pay its foreign currency debt obligations during the month in review,” it added.
While the latest amount narrowed the January-to-March shortfall to $68 million, the year to-date BoP position remains much lower than the $3.79-billion surplus in the same period in 2019.
The tally still falls below the BSP’s forecast of a $3-billion balance surplus for this year.
“This development may be attributed partly to the reversal of foreign portfolio investments to net outflows from net inflows in the first quarter of 2019, even as the merchandise trade deficit declined,” the central bank explained.
Taking preliminary results from the first three days of April into account, year-todate flows of “hot money” — so called because how easily these come in and out of the economy —were negative, with net outflows at $1.48 billion, reversing the $293.46-million net inflows a year ago.
The country’s trade gap, meanwhile, plunged by 27.07 percent to $7.55 billion in the first three months of the year.
The BoP position reflected the final gross international reserves level of $88.86 billion as of end-March.
This level “represents an ample external liquidity buffer, which is equivalent to around 7.9 months’ worth of imports of goods and services and payments of primary income,” the BSP said.
Dollar inflows
In an outlook also on Tuesday, ING Bank Manila senior economist Nicholas Antonio Mapa said he expected the payments balance to be supported by the financial account, which would be boosted by the government’s financing for its coronavirus disease 2019 (Covid-19) pandemic response.
He said the loans secured by the Department of Finance from the World Bank, Asian Development Bank, Asian Infrastructure Investment Bank and other multilateral institutions “will all help bring dollar inflows to support the BoP.”
“The current account, however, may likely fall further into deficit as remittances fall off with scores of Filipinos sent home due to the pandemic’s destruction of the global job market,” he warned.