Dollars swamped PH in March due to loans
MANILA -More money flowed into the Philippines than out of the country last March, showing a $1.27- billion surplus in the balance of payments (BOP) that meant a 68-percent increase from $754 million in the same month last year.
Also in March, the Bangko Sentral ng Pilipinas (BSP) said its gross international reserves (GIR) increased to $101.5 billion, which was even higher than the $100.2 billion that was earlier estimated for the month. February GIR was at $98.2 billion.
“The BOP surplus in March 2023 reflected inflows arising mainly from the national government’s net foreign currency loans, which were deposited with the BSP, and net income from the BSP’s investments abroad,” the central bank said in a statement.
The BOP has been swinging to deficit then surplus month after month since a $2.3-billion deficit in September 2022.
The latest monthly readout brought the first-quarter BOP to a surplus of $3.5 billion, which was seven times as big as the $495-million surplus in the same period of 2022.
Aided by remittances
“Based on preliminary data, the cumulative BOP surplus reflected inflows that stemmed mainly from personal remittances, net foreign borrowings by the national government, and foreign direct investments,” the BSP said.
Last January, the national government raised $3 billion as planned from a three-tranche issuance of global bonds.
Meanwhile, available BSP data show that personal remittances from Filipinos who are based abroad reached $5.9 billion for January to February. Further, foreign direct investment net inflows were so far pegged at $448 million in January.
As for the GIR at end-March, it represented 7.6 months’ worth of imports of goods and payments of services and primary income.
The BSP’s reserves were also about 6.1 times the country’s short-term external debt based on original maturity and 4.2 times based on residual maturity.
More inflows expected
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said that in the coming months, BOP data could still be supported by the continued growth in the country’s structural US dollar inflows such as personal remittances, revenues from business process outsourcing, exports, foreign investments, foreign tourism receipts, among others.
“The proposed $1.5 billion to $2 billion US dollar or euro-denominated retail bonds to be offered by the national government [this quarter], with a tenor of at least five years, would also be added to the country’s BOP and GIR by then,” Ricafort said.
Based on the latest forecast by the BSP, the BOP deficit of $7.3 billion at end-2022 is expected to be narrower this year and next.
The BSP said the emerging BOP forecasts for 2023 and 2024 are underpinned by expectations of subdued global and domestic economic activity this year followed by slightly improved activity by next year.
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