The country posted a balance of payments (BOP) surplus of $215 million in July, the fifth straight month that more dollars entered the country.
But Bangko Sentral ng Pilipinas (BSP) data released Friday showed that the July surplus was lower than the $418 million a month ago and the $354 million posted a year ago.
The surplus meant that the amount of dollars that entered the economy that month was more than the amount that left.
The country’s BOP position as of end-July stayed at a surplus of $848 million, up from $634 million as of end June but below the $2.038 billion posted in the first seven months of last year.
“The BOP surplus for July is the third month of continued (year-to-date] surplus position after four consecutive months of BOP shortfall reflecting the very volatile global financial market that saw foreign capital moving out to safe haven territories. But the resilient overseas Filipino workers’ remittances and business process outsourcing revenue supported by strong foreign direct and portfolio investments represent the underlying dynamics of the BOP surplus for the month and for the first seven months of 2016,” BSP Deputy Governor Diwa C. Guinigundo said in a text message to reporters.
“This is also reflected in the BSP’s favorable foreign exchange operations and investments as well as deposits of foreign exchange by the national government with the BSP despite debt servicing of public debt. If this momentum continues with the seven-month cumulative surplus of $848 million, we expect that the $2-billion forecast for the entire year is doable. This external payments surplus is the fundamental basis of the broadly stable exchange rate of the peso,” Guinigundo added.
The BSP had revised downward to $2 billion its 2016 BOP surplus target from $2.2 billion previously.
The BOP is a summary of all the businesses the country does with the rest of the world.
BOP data is tracked closely to ensure that the supply of dollars in the economy remains ample to allow the government as well as businesses 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 and tourism.
The country uses the dollars it earns for the importation of goods, such as food and fuel, and for external debt payments.