The Philippines continued to make more money from overseas in September, as exports surged, imports slumped and income from remittances and outsourcing firms remained firm, official data released on Monday showed.
The country’s latest balance-of-payments (BOP) report showed inflows were enough to offset outflows of foreign capital from the country, as short-term portfolio investors divested from the Philippines to bring their money back to the United States.
In September, the country posted a BOP surplus of $98 million which was, however, lower than the $114-million surplus recorded the month before.
For the first nine months of the year, the country still had a deficit of $3.43 billion, which was mainly a result of the $4.48-billion deficit in January.
For the whole year, the Bangko Sentral ng Pilipinas expects the country to post a BOP surplus of $1.1 billion. With only three months remaining, however, this projection seems unlikely to be realized.
The BOP position, which is reported by the central bank, is a summary of all transactions between the Philippines and the rest of the world. BOP surpluses indicate the country’s ability to maintain a healthy supply of foreign exchange, which the government and businesses need to do business with the rest of the world.
Surpluses also allow the BSP to preserve and even build up its foreign exchange reserves, which serve as the country’s main line of defense against external shocks that may lead to a BOP crisis.
At the end of September, the country had $80.43 billion in foreign exchange reserves, enough to cover 11 months worth of imports. This was well above the international benchmark of three to six months.
On the income side, the central bank counts remittances from migrant workers, dollar income from remittances and various industries like outsourcing and tourism and export receipts. Investments and proceeds from foreign loans are also counted as income. Paolo G. Montecillo