BOP surplus down to $75M in May

The Philippines posted a balance of payments (BOP) surplus of $75 million in May, or less than a third of the surplus in the previous month of $274 million.

The country’s year-to-date BOP position, which is the difference between the amount of foreign exchange that entered and left the country, showed a surplus of $1.88 billion. A surplus indicates that inflows were more than the outflows.

The monthly BOP surplus of $75 million in May was also lower than the $138 million posted in the same month last year but was better than the $960 million in deficit in February, which was a result of big payments made to foreign creditors.

Foreign portfolio investments or the so-called “hot money”—referring to placements in local equities, government securities, and other peso-denominated debt paper—rose by 31.6 percent in May to $2 billion, helping keep the country’s BOP position in positive territory.

In a previous statement, the BSP said the government made huge debt payments in May, which led to a slight dip in the country’s foreign exchange reserves to $82.9 billion. These payments may have also contributed to the low BOP surplus during the month.

Data on remittances from overseas Filipino workers (OFW) for  May have yet to be released. Remittances are the country’s largest source of foreign exchange, followed by income from the business process outsourcing (BPO) industry, exports and hot money flows.