MORE money came into the Philippines than what went out in June this year, providing strength to the Philippine economy despite volatile conditions in financial markets.
Data from the Bangko Sentral ng Pilipinas (BSP) showed that the country was well on its way to reaching official projections for its balance-of-payments (BOP) position for 2015.
For June, the country posted a BOP surplus of $485 million, a turnaround from the previous month’s deficit of $58 million.
The BOP is a summary of all the businesses the country does with the rest of the world. June’s surplus means the amount of dollars that entered the economy during the month was more than the money that left the country.
The country ended the first semester of the year with a surplus of $1.6 billion, doubling the $864 million surplus recorded for all of 2014.
The Bangko Sentral ng Pilipinas (BSP) expects the Philippines to end 2015 with a BOP surplus of $2 billion.
Sources of income for the country include remittances from overseas Filipino workers, income from exports of goods and services, foreign investments and revenues from certain industries such as tourism and business process outsourcing.
In the meantime, the country uses the dollars it earns for the importation of goods, such as food and fuel, and the payment of foreign debt. Divestments made by foreign investors are also counted as outflows.
BOP data is tracked closely to ensure that the supply of dollars in the economy remains ample enough to allow businesses and the government to transact with the rest of the world.
The surplus in the BOP led to an increase in the country’s dollar reserves in June. Preliminary data showed that the country’s gross international reserves (GIR) rose to $80.8 billion as of the end of June this year, higher by $0.4 billion than the May level of $80.4 billion.
The country’s reserves, which are held by the central bank, were also equivalent to 4.5 times the country’s short-term external debt based on residual maturity.
Short-term debt based on residual maturity refers to outstanding external debt with original maturity of one year or less, plus principal payments on medium- and long-term loans of the public and private sectors falling due within the next 12 months.