PH economy off to strong start with Jan-Feb net dollar inflows

By: - Reporter / @daxinq
/ 05:58 PM March 19, 2019
BSP’s anti-inflation rate hikes from 2018 continue to crimp loan growth, market liquidity

Bangko Sentral ng Pilipinas. (File photo / Philippine Daily Inquirer)

The Philippine economy received more dollar inflows than outflows in February helping buttress the surplus in the country’s balance of payments for the first two months of 2019, according to data from the Bangko Sentral ng Pilipinas (BSP).

The country’s overall balance of payments — the aggregate net value of all transactions for goods and services with the rest of the world — yielded a surplus of $467 million in February 2019, representing a reversal of the $429 million deficit recorded in the same month last year.


“Inflows in February 2019 stemmed mainly from BSP’s foreign exchange operations, national government’s net foreign currency deposits, and BSP’s income from its investments abroad,” the central bank said.

These were partially offset, however, by the payments made by the national government for its foreign exchange obligations during the month in review.


On a cumulative basis, the balance of payments position for the January–February 2019 period posted a surplus of $3.17 billion, marking a turnaround from the $961 million deficit recorded in the first two months of 2018.

“The surplus may be attributed partly to remittance inflows from overseas Filipinos in January 2019 and net inflows of foreign portfolio investments (net BSP-registered transactions based on custodian banks’ reports) for the first two months of the year, which was a reversal of the net outflows reported in January–February 2018,” the central bank said.

The reported balance of payments position reflected the final gross international reserves level of $82.78 billion as of end-February 2019.

At this level, the country’s dollar reserves represent a “more than ample” liquidity buffer and is equivalent to 7.3 months’ worth of imports of goods and payments of services and primary income, the central bank said.

It is also equivalent to 5.2 times the country’s short-term external debt based on original maturity and 3.6 times based on residual maturity.

For all of last year, the Philippine economy recorded a balance of payments deficit of $2.3 billion — the largest on record — due to the yawning trade gap that was, in turn, caused by the government’s heavy investments for the Duterte administration’s infrastructure buildup program. /atm

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