August BOP surplus hits 5-month high of $682M

The Philippines posted a balance-of-payments (BOP) surplus of $682 million in August, the highest in five months.

Bangko Sentral ng Pilipinas (BSP) data released Monday showed that the surplus in August was a reversal of the $450-million deficit a year ago as well as the biggest since March’s $854 million.

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

“The BOP surplus for the month of August was due to the BSP’s foreign exchange operations and foreign exchange deposits of the national government, which were only partly offset by payments of the national government for maturing obligations,” BSP Governor Amando M. Tetangco Jr. said.

Following six straight months of surpluses, the country’s BOP position as of end-August remained at a surplus of $1.53 billion, up from end-July’s $848 million but below the $1.59 billion posted in the first eight months of last year.

“With a cumulative BOP for the first eight months of $1.53 billion, the projection for the full year is within reach,” Tetangco said.

The BSP had revised downward to $2 billion its 2016 BOP surplus target from $2.2 billion previously.

Tetangco said the BSP “continues to monitor global developments and market sentiment with regards to announcements of advanced economies’ central banks, including the Fed, as these could lead to global portfolio rebalancing away from emerging market economies, including the Philippines.” Markets are awaiting the next moves of the US Federal Reserve as well as the Bank of Japan, both scheduled to meet in the middle of this week.

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 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. Ben O. de Vera