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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.

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