11-month BOP posts surplus of $6.27B
The Philippine economy moved further into the black in terms of the amount of dollars it has earned this year outpacing the amount it has spent in its transactions with the rest of the world, according to the latest data from the central bank.
In a statement, the Bangko Sentral ng Pilipinas said that the country’s overall position for its balance of payments (BOP)—the total net value of the economy’s dealings with foreign parties—posted a surplus of $541 million in November 2019.
This was lower than the $847-million surplus recorded in the same month last year, but overall marked a positive development that reinforced the strong net inflows of hard currency into the country this year.
“Inflows in November 2019 reflected the BSP’s foreign exchange operations, increase 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.
On a cumulative basis, the BOP position for the January-November 2019 period posted a surplus of $6.27 billion, representing a turnaround from the $4.75-billion BOP deficit recorded in the first 11 months of 2018.
“The surplus may be attributed partly to lower trade-in-goods account deficit, higher net receipts in the trade in services account and personal remittance inflows from overseas Filipinos, and net inflows of foreign direct investments and foreign portfolio investments,” the BSP said.
The latest BOP position reflected the final gross international reserves (GIR) level of $86.23 billion as of end-November 2019.
At this level, the GIR represented a more-than-ample liquidity buffer equivalent to 7.5 months’ worth of imports of goods 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 BOP surplus supports the value of the local currency against the US dollar in the foreign exchange market.
