BOP SURPLUS SHRINKS TO $8M IN JULY, A 5-MONTH LOW–BSP
THe country’s overall dollar surplus shrank to a 5-month low in July, the Bangko sentral ng Pilipinas (BSP) reported on Friday. The Balance of Payments (BOP)—OR the summary of the Philippines’s transactions with the rest of the world—registered an $8-million surplus in July, the lowest for the year since it showed a deficit in January.
The BOP is usually considered as an important economic indicator in an economy as it shows the level of earnings or expenses of the Philippines with its transactions with the world. a surplus means that the country made more dollar earnings than its expenses during the period.
Data from the BSP showed that the BOP surplus in July is a decline from the $80-million surplus in the previous month and the $248 million in the same month last year.
“The BOP surplus in July 2020 reflected mainly the inflows from the national government’s [Ng] foreign loan proceeds that were deposited with the BSP, as well as the Bsp’s income from its investments abroad,” the Central Bank said in a statement.
“These inflows were offset, however, by the foreign currency withdrawals made by the Ng to pay its foreign currency debt obligations during the month in review,” it added.
For the first seven months of the year, the country’s BOP surplus hit $4.12 billion, lower than the $5.04 billion in the same seven-month period in 2019.
“The current BOP surplus [for the first seven months of the year] was supported mainly by foreign borrowings of the Ng, the bulk of which were drawn in april up to July, and the lower merchandise trade deficit,” the BSP said.
“These positive outcomes negated fully the impact of higher net outflows of foreign portfolio investments, and lower net inflows from foreign direct investments, trade in services, and personal remittances,”it added.