The entire Philippine economy narrowly averted spending more dollars than it made in September, thanks to foreign currency deposits of the national government and income from the central bank’s investments overseas, according to official data released on Friday.
In a statement, the Bangko Sentral ng Pilipinas (BSP) said the country’s overall balance of payments position posted a surplus of $38 million in September 2019—the smallest surplus on record this year, apart from the single $404-million deficit recorded in June.
Nonetheless, last month’s balance of payments position—the net tally of dollar flows due to the transactions of the country’s public and private sectors for investments, goods and services with the rest of the world—was still significantly better than the $2.7-billion deficit recorded in the same month last year.
“Inflows in September 2019 were reflected in the national government’s net foreign currency deposits and BSP’s income from its investments abroad,” the central bank said. “These inflows were offset, however, by outflows representing payments made by the national government on its foreign exchange obligations during the month in review.”
More importantly, however, the country’s cumulative balance of payments position from January to September showed a surplus of $5.57 billion, marking a complete turnaround from the $5.14-billion deficit recorded in the first three quarters of 2018.
“The surplus may be attributed partly to personal remittance inflows from overseas Filipinos and net inflows of foreign direct investments,” the central bank said.
BSP planners expect the country’s balance of payments to end 2019 with a surplus of $3.7 billion compared to the $2.3-billion deficit the previous year.
According to authorities, this would be made possible by an expected surge in investments into the local financial markets which, recorded in the capital and financial accounts, may rise to a $12.3-billion surplus by year-end compared to last year’s $5.2-billion surplus.
The latest balance of payments position reflects the final gross international reserves level of $85.58 billion as of end-September 2019.
At this level, the country’s dollar reserves represented a “more-than-ample” liquidity buffer equivalent to 7.4 months’ worth of imports of goods and payments of services and primary income, the central bank said. It is also equivalent to 5.4 times the country’s short-term external debt based on original maturity and 3.9 times based on residual maturity.