BoP deficit narrows, GIR up as of end-October

THE country’s finances improved at the end of October following a balance of payments (BoP) surplus and dollar reserve gains, central bank data released on Friday showed.

A $711-million surplus last month trimmed the year-to-date BoP deficit to $7.1 billion, the Bangko Sentral ng Pilipinas (BSP) said in a statement, while gross international reserves (GIR) also increased to $94 billion from $93 billion.

October’s surplus, which was lower than the $1.1 billion recorded a year earlier, “reflected inflows arising mainly from the national government’s net foreign currency deposits with the Bangko Sentral ng Pilipinas,” the BSP said.

The deposits included proceeds from the government’s issuance of $2 billion in global bonds last month.

The cumulative BoP position last year was better at a $476-million surplus, which the BSP attributed to “the widening trade in goods deficit as goods imports continued to surpass goods exports on the back of the persistent surge in international commodity prices and resumption in domestic economic activities.”

It noted that the country’s trade deficit as of end-September had ballooned to $46.7 billion from $28.6 billion in the comparable 20298 period.

The latest GIR level, meanwhile, “represents a more than adequate external liquidity buffer equivalent to 7.5 months’ worth of imports of goods and payments of services and primary income,” the BSP said.

“Moreover, it is also about 6.9 times the country’s short-term external debt based on original maturity and 4.1 times based on residual maturity,” it added.