BoP surplus soars to 16- month high
THE country’s balance of payments (BoP) posted a 16-month-high surplus of $2.43 billion in May, increasing the year-to-date tally to more than $4 billion, Bangko Sentral ng Pilipinas (BSP) data showed on Wednesday.
The May amount was wider than the $1.66-billion and $928-million surpluses in April and in May 2019, respectively. It is also the highest since the $ 2.70- billion surplus in January last year.
In a statement, the central bank said that the latest surplus “reflected mainly the inflows arising from the national government’s (NG) foreign currency deposits with the BSP, as well as the BSP’s foreign exchange operations and income from its investments abroad.”
“These inflows were partially 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.
While the May figure boosted the January- to- May surplus to $ 4.02 billion, it remains lower than the $5.19-billion surplus in the same period in 2019.
The tally is also bigger than the BSP’s revised forecast of a $600-million surplus for this year.
“The current BoP surplus was supported mainly by foreign borrowings by the NG in April and May, coupled with lower merchandise trade deficit and by sustained net inflows of personal remittances from overseas Filipinos,” the Bangko Sentral said.
The Bureau of the Treasury earlier reported that the government’s external debt increased by 4.4 percent to P2.85 trillion at end-May.
Latest data from the Philippine Statistics Authority showed that the country’s trade gap eased by 43 percent to $8.02 billion in the first four months of 2020 from the $ 14.13- billion shortfall a year ago.
Personal remittances sent home by overseas Filipino workers hit $8.21 billion in the first quarter of the year, a 1.5-percent improvement from $8.09 billion in January to March 2019.
Cash remittances, which only count money coursed through banks, jumped by 1.4 percent to $7.40 billion from $7.29 billion a year earlier.
“These inflows fully negated the impact of lower trade in services receipts, the net foreign portfolio investment outflows and lower foreign direct investments inflows,” the central bank said.
Net outflows of foreign portfolio investments remained in the negative territory in the first five months at $3.07 billion, 348.5 percent bigger than the year-ago figure.
Net inflows of foreign direct investments in the first quarter totaled $1.66 billion, 14.2 percent lower year-on-year.
The BoP position reflected the final gross international reserves (GIR) level of $93.29 billion as of end-May.
This level “represents an ample external liquidity buffer, which is equivalent to 8.4 months’ worth of imports of goods and payments of services and primary income,” the BSP said.
The final GIR is also about seven times the country’s short- term external debt based on original maturity and 4.6 times based on residual maturity, it added.