The country’s balance of payments posted a surplus of $1.14 billion in October, the highest in six months, putting the 10-month figure in the positive territory, data from the Bangko Sentral ng Pilipinas show.
“The BOP surplus in October reflected inflows arising mainly from the national government’s net foreign currency deposits with the BSP and the BSP’s income from its investments abroad,” the BSP said in a statement Wednesday.
It said the BOP surplus in October was lower than the $3.44-billion surplus registered in the same month last year. The surplus in October brought the cumulative BOP in the first 10 months to $476-million surplus, reversing the deficit of $665 million in the first nine months.
The figure, however, was lower than the $10.31-billion surplus recorded in the same period last year when imports were sluggish amid the pandemic and border restrictions.
Imports began to recover this year, posting faster growth than exports that led to a widening trade deficit.
“Based on preliminary data, this cumulative BOP surplus was partly attributed to net inflows from personal remittances, net foreign borrowings by the national government, foreign direct investments and trade in services,” the BSP said.
The BOP position reflects an increase in the final gross international reserves level to $107.89 billion as of end-October from $106.6 billion in September. The 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 7.9 times the country’s short-term external debt based on original maturity and 5.5 times based on residual maturity.
Michael Ricafort, chief economist of Rizal Commercial Banking Corp., said the BOP data could still improve in view of the seasonal increase in OFW remittances and conversion to pesos in preparation for the Christmas season in the latter part of the year.
Ricafort also cited the increase in various corporate fund-raising activities/investment banking transactions in the pipeline especially from November to December ahead of the Christmas holiday break.
He said these could be offset by the recent widening trade deficit/net imports amid any additional measures to further reopen the economy in view of increased vaccinations against COVID-19 that already significantly reduced new COVID-19 cases.
Balance of payments is the difference in total value between payments into and out of a country over a period.
The BSP earlier revised downward the BOP surplus projection this year to $4.1 billion from $7.1 billion previously, taking into account the more guarded view of global developments for the rest of the year amid the pandemic.
The $4.1-billion BOP surplus projection this year is lower than the actual BOP surplus of $16 billion last year.