BoP surplus plunges to $38M in September
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Fri, 18 Oct 2019 16:55:05 +0000
THE country’s balance of payments (BoP) position remained positive in September, but dropped from the previous month’s three-month high, according to the Bangko Sentral ng Pilipinas (BSP).
In a statement, the central bank said on Friday that last month’s $38-million surplus was significantly lower than August’s $493 million, but a reversal of the $2.69-billion deficit recorded a year earlier.
“Inflows in September 2019 were reflected in the national government’s net foreign currency deposits and [the] BSP’s income from its investments abroad,” it explained.
These inflows were partially offset by the government’s foreign-exchange obligations during the month.
The year-to-date tally rose to a $5.56-billion surplus from $5.52 billion in the first eight months of 2019. It, however, erased the $5.13-billion shortfall in the same period last year.
That tally remained higher than the Bangko Sentral’s upwardly revised forecast of a $3.7-billion surplus for this year.
“The surplus may be attributed partly to personal remittance inflows from overseas Filipinos and net inflows of foreign direct investments,” the BSP said.
Personal remittances reached $21.99 billion from January to August, up 3.6 percent from the $21.22 billion posted a year earlier.
Net foreign direct investments (FDI) hit $4.11 billion in the first seven months, down 39.1 percent from the amount in the same period in 2018.
Positive inflows
Security Bank Corp. chief economist Robert Dan Roces said on Friday the BoP “will continue to see positive fundamental inflows from higher net receipts from increased remittances in the holiday season.”
He warned, however, of a downside risk from lower FDI on account of the global slowdown.
Nevertheless, he said the build-up in the country’s dollar reserves “will prove beneficial for the BoP position on the back of probable declines in net inflow from FDI.”
In September, the Philippines’ gross international reserves (GIR) hit a record high of $86.16 billion.
“The surplus position is positive for the peso [amid] the volatility brought by geopolitical concerns,” Roces said.
The currency closed at P51.29 to the dollar on Friday, stronger than its P51.42:$1 finish the previous day.
The BoP reflects the final GIR level of $85.58 billion as of end-September, according to the central bank.
The BoP summarizes the country’s economic transactions with the rest of the world over a certain period.
It ended at a deficit of $2.306 billion last year, wider than the $863 million recorded in 2017, but lower than the BSP’s $5.5-billion forecast.