BOP REGISTERS 7-MO. SURPLUS

The surplus may be attributed partly to remittance inflows from overseas Filipinos during the first half of the year and net inflows of foreign direct investments during the first five months of the year

The overall balance of payments (BoP), or what is left after the country’s foreign-currency expenses are deducted from its foreign-currency earnings, posted another surplus in July, the Bangko Sentral ng Pilipinas (BSP) said on Friday.

The BoP at $248 million reflects a turnaround from the $455 million deficit listed in the same month a year ago. This also compares with the $404 million deficit reported in May.

Outflows during the month were traced to payments made by the national government (NG) on its foreign exchange (FX) obligations.

However, NG’s net FX deposits and the BSP’s FX operations and offshore investments partially offset the outflows in June.

Year-to-date, the country’s BoP position in the first seven months of the year stood as a surplus of $5.04 billion, a reversal from the recorded $3.71 billion deficit in the same period last year.

“The surplus may be attributed partly to remittance inflows from overseas Filipinos during the first half of the year and net inflows of foreign direct investments during the first five months of the year,” the BSP said.

The announced BoP similarly reflects the final gross international reserves (GIR) level of $85.18 billion as of end-July 2019.

“At this level, the GIR represents a more than ample liquidity buffer and is equivalent to 7.4 months’ worth of imports of goods and payments of services and primary income,” the BSP said.

“It is also equivalent to 5.2 times the country’s short-term external debt based on original maturity and 3.8 times based on residual maturity,” it added.

The BoP had been in a state of deficit three years in a row or since 2016. Last year when the balance stood as a shortfall totaling $2.306 billion for instance, the balance was in surplus only in August at $1.272 billion, then again in November at $847 million and finally in December when this stood at $2.442 billion.