PH’s dollar stash highest in November at any time under Duterte

The Philippine economy moved further into the black in foreign currency terms as it earned more dollars than it spent this year, according to new data from the Bangko Sentral ng Pilipinas (BSP).

In a statement, the BSP said the country’s overall position for its balance of payments — the total net value of the economy’s dealings with foreign parties — posted a surplus of $541 million in November 2019.

It was lower than the $847 million surplus in the same month in 2018 but overall marked a strong inflow of hard currency into the country in 2019.

The inflow of dollars this November “reflected the BSP’s foreign exchange operations, increase in the national government’s net foreign currency deposits and BSP’s income from investments abroad,” the BSP statement said.

The government, however, had to use dollars for payments on its foreign debts, which offset the strong inflow during November.

On a cumulative basis, the BOP position for the January to November 2019 period posted a surplus of $6.27 billion, a turnaround from the $4.7 billion BOP deficit in the first 11 months of 2018.

The BSP said the surplus is attributable to lower trade deficit, higher net receipts, personal remittance from overseas Filipinos and net inflow of foreign direct investment and foreign portfolio investment.

The latest balance of payments position reflects the final gross international reserves level of $86.23 billion as of end-November 2019.

The government now has more than enough liquidity for 7.5 months’ worth of importation and payments of services and primary income.

It is also equivalent to 5.4 times the country’s short-term external debt based on original maturity and 4.2 times based on residual maturity.

In general, a balance of payments surplus supports the value of the local currency against the US dollar on the foreign exchange market.

Edited by TSB