PH posts $854-M BOP surplus

The Philippines posted a balance of payments (BOP) surplus of $854 million in March—a 13-month high—to reverse two straight months of deficit.

Bangko Sentral ng Pilipinas (BSP) data released Tuesday showed that the BOP surplus last March was the highest since the $985 million recorded in February last year.

The surplus meant that the amount of dollars that entered the economy that month was more than the money that left the country.

The surplus in March narrowed the first-quarter deficit to $275 million, a reversal of the $877-million surplus during the first three months of last year.

The country posted BOP deficits during the first two months of 2016—$813 million in January and $316 million in February.

The BOP is a summary of all the businesses the country does with the rest of the world.

BOP data are tracked closely to ensure an ample supply of dollars in the economy and allow the government and the private sector to transact with the rest of the world.

Sources of dollar income for the country include remittances from Filipinos overseas, sales from exports of goods and services as well as foreign investments and revenues from industries such as business process outsourcing (BPO) and tourism.

The country uses the dollars it earns for the importation of goods such as food and fuel as well as for foreign debt payments.

The BSP had projected the BOP surplus to reach $2.2 billion this year and result in an increase in the gross international reserves (GIR) to $82.7 billion, equivalent to nine months’ worth of import cover.

The BSP earlier reported that the country’s dollar reserves hit a two-year high of $82.6 billion at the end of the first quarter following a successful global bond sale.

The end-March GIR level was not only higher than the $81.9 billion in end-February but also the highest since December 2013’s $83.2 billion.

The BSP had attributed the higher GIR mostly to “net foreign currency deposits by the national government as well as the BSP’s income from investments abroad and revaluation adjustments on the BSP’s foreign currency-denominated reserves.”

Last February, the Philippines sold $2 billion in 25-year sovereign bonds at a record-low yield of 3.7 percent. Of the proceeds, $500 million will be new money to be infused into the budget while $1.5 billion will be switched to retire previously issued IOUs maturing between October this year and October 2034.

The first quarter GIR level can cover 10.3 months’ worth of imports of goods as well as payments of income and services. Ben O. de Vera