The country’s balance of payments posted a surplus of $1.04 billion in August, higher than the $657-million excess recorded in the same month last year, the Bangko Sentral ng Pilipinas said Friday.
“The BOP surplus in August 2021 was due mainly to the additional allocation of Special Drawing Rights to the Philippines given the IMF’s [International Monetary Fund] efforts to increase global liquidity amid the pandemic and the BSP’s income from its investments abroad,” the BSP said in a statement.
These were partly offset by the national government’s foreign currency withdrawals from its deposits with the BSP as the government settled foreign currency debt obligations and paid for various expenditures and the BSP’s net foreign exchange operations.
The BOP surplus in August reduced the cumulative BOP deficit in the first eight months to $253 million. The eight-month BOP deficit was a reversal of the $4.77-billion surplus posted in the same period last year.
The cumulative BOP deficit was partly attributed to a wider merchandise trade deficit and lower net foreign borrowings by the national government compared to the same period last year.
Based on the Philippine Statistics Authority’s trade statistics, the trade balance in the first seven months reached $21.31 billion, up from $13.51-billion deficit registered a year earlier.
The BOP position reflects an increase in the gross international reserves level to $107.96 billion as of end-August from $107.15 billion in July. The latest GIR level represents a more than adequate external liquidity buffer equivalent to 10.8 months’ worth of imports of goods and payments of services and primary income.
It is also about 7.6 times the country’s short-term external debt based on original maturity and 5.3 times based on residual maturity.
BSP Governor Benjamin Diokno earlier said the special drawing rights allocation of 1.958 billion (equivalent to around $2.777 billion) from the IMF to the Philippines would boost the country’s gross international reserves and reduce reliance on debt.
Member countries of IMF were allocated SDRs—the fund’s unit of exchange backed by dollars, euros, yen, sterling and yuan—in proportion to their quota shares in the IMF. The SDR valuation is calculated daily and stood at $1.41847 each as of Aug. 23.