By Luisa Maria Jacinta C. Jocson, Reporter
THE PHILIPPINES’ balance of payments (BoP) position posted a surplus in September, the widest in nearly 4 years, the Bangko Sentral ng Pilipinas (BSP) said.
Data from the BSP showed the BoP ballooned to a $3.526-billion surplus in September from $88 million in August. It was also a turnaround from the $414-million deficit in the identical period a 12 months ago.
The September BoP also marked the most important monthly surplus in near 4 years or since $4.236 billion in December 2020.
“The BoP surplus in September 2024 reflected inflows mainly from the National Government’s (NG) net foreign currency deposits with the BSP and net income from the BSP’s investments abroad,” the central bank said.
The BoP measures the country’s transactions with the remainder of the world. A surplus shows that more cash entered the Philippines, while a deficit means more funds left.
At its end-September position, the BoP reflected a final gross international reserve (GIR) level of $112.7 billion, higher than $107.9 billion as of end-August.
The dollar reserves were enough to cover 4.5 times the country’s short-term external debt based on residual maturity.
It was also similar to 8.1 months’ price of imports of products and payments of services and first income.
An ample level of foreign exchange buffers safeguards an economy from market volatility and is an assurance of the country’s capability to pay debts within the event of an economic downturn.
YEAR TO DATE
Meanwhile, the country’s BoP position registered a $5.117-billion surplus within the January-September period, widening from the $1.736-billion surplus a 12 months earlier.
“Based on preliminary data, this cumulative BoP surplus reflected mainly the narrowing trade in goods deficit alongside the continued net inflows from personal remittances, trade in services, and net foreign borrowings by the NG,” it said.
Latest data from the local statistics authority showed that the trade gap within the January-August period narrowed by 4.35% to $34.3 billion from the $35.86-billion deficit a 12 months ago.
“Moreover, net foreign direct and portfolio investments contributed to the BoP surplus,” the BSP added.
Separate data from the central bank showed that net inflows of foreign direct investments rose by 7.5% to $5.256 billion within the first seven months from $4.888 billion a 12 months earlier.
Meanwhile, foreign portfolio investments yielded a net inflow of $1.998 billion within the January-August period, surging by 542.9% from the $310.77-billion net inflows a 12 months ago.
Rizal Industrial Banking Corp. Chief Economist Michael L. Ricafort said the BoP surplus ballooned amid the proceeds of the NG’s latest dollar bond offering. Â
The federal government raised $2.5 billion from its issuance of triple-tranche US dollar-denominated global bonds at end-August. This marked its second global bond offering this 12 months.
Mr. Ricafort also noted continued growth in remittances and business process outsourcing revenues, amongst others.
“This partly reflects the record GIR recently that’s similar to greater than 8 months of imports and greater than double versus the international standard of three to 4 months, thereby would fundamentally provide a greater cushion for the peso exchange rate,” he said.
Separate BSP data showed the country’s GIR rose to a record high of $112 billion at end-September amid a surge in foreign currency deposits.
“The present account also contributed to this as exports may need accelerated and imports slowed down because of currency depreciation,” John Paolo R. Rivera, a senior research fellow on the Philippine Institute for Development Studies, said in a Viber message.
Within the first half of the 12 months, the country’s current account deficit stood at $7.1 billion, accounting for 3.2% of GDP. The BSP expects the present account deficit to succeed in $6.8 billion this 12 months, similar to 1.5% of GDP.
“Increase in income from foreign investments, remittance inflows, sale of assets could have also contributed to this,” Mr. Rivera added.
Mr. Ricafort said that stronger dollar inflows in the approaching months could further support the BoP. He also noted the upcoming holiday season, which might boost remittances and exports.
For 2024, the BSP expects the country’s BoP position to finish at a $2.3-billion surplus, similar to 0.5% of GDP.
