The Philippines saw more dollars enter than exit the local economy in August, further widening the surplus of hard currency that had been building up since the start of the coronavirus pandemic as the country spent less for imports.
At the same time, the Bangko Sentral ng Pilipinas said that the latest positive figure was also due to inflows from its foreign exchange operations and overseas investments.
In a statement, the BSP said that the country’s overall balance-of-payments position posted a surplus of $657 million in August 2020, bringing the year-to-date surplus to $4.77 billion, or lower than the $5.53-billion surplus recorded in the same period a year ago.
The balance of payments is the net tally of the amount of dollars the enters and leaves the Philippine economy due to the all transactions of private and public sector entities with overseas parties. These transactions may be dollar earnings from exports, spending for imports, payments for goods and services or investment inflows or outflows, among others.
A surplus in the balance of payments means more dollars are entering the economy than leaving it, while a deficit represents the opposite.
According to the central bank, the current dollar flow surplus was supported mainly by foreign borrowings by the national government along with the lower net deficit in merchandise trade.
“These outcomes offset fully the impact of higher net outflows of foreign portfolio investments and lower net inflows from foreign direct investments, trade in services and personal remittances,” the BSP said. INQ