$248M in net dollar inflow posted in July

More dollars entered the Philippine economy than left it in July, thanks to inflows from the central bank’s foreign currency operations as well as foreign investments in government bonds, the Bangko Sentral ng Pilipinas said on Monday.

In a statement, the BSP said the overall position of the country’s balance of payments (BOP)—the net tally for all the economy’s overseas transactions—posted a surplus of $248 million in July 2019.

This was a turnaround from the $455-million BOP deficit in the same month last year.

“The July inflows were offset partially, however, by outflows which were reflected in the payments made by the government on its foreign exchange obligations during the month in review,” the central bank said.

A balance of payments surplus means the Philippine economy is earning more dollars than it is spending, whether for trade and services from abroad or in terms of investments in the financial markets. A surplus also supports the value of the peso against the US dollar.

On a cumulative basis, the BOP position for Jan-July 2019 posted a surplus of $5.04 billion, representing a turnaround from the $3.71 billion deficit in the first seven months of 2018.

“The surplus may be attributed partly to remittance inflows from overseas Filipinos in the first half of the year and net inflows of foreign direct investments during the first five months of the year,” the BSP said.

The BOP position reflects the final gross international reserves level of $85.18 billion as of end-July 2019.