The country’s balance of payments position posted a surplus of $38 million in September, a reversal of the $2.7-billion deficit a year ago, the Bangko Sentral ng Pilipinas said Friday.
“Inflows in September 2019 were reflected in the national government’s net foreign currency deposits and BSP’s income from its investments abroad. These inflows were offset, however, by outflows representing payments made by the government on its foreign exchange obligations during the month in review,” the BSP said in a statement.
This brought the BOP position in the first three quarters to a surplus of $5.57 billion, a turnaround from the $5.14-billion deficit recorded in the same period last year.
“The surplus may be attributed partly to personal remittance inflows from overseas Filipinos and net inflows of foreign direct investments,” the BSP said.
It said the BOP position reflected the final gross international reserves level of $85.58 billion as of end-September. “At this level, the GIR represents a more-than-ample liquidity buffer equivalent to 7.4 months’ worth of imports of goods and payments of services and primary income,” it said.
The GIR was also equivalent to 5.4 times the country’s short-term external debt based on original maturity and 3.9 times based on residual maturity.
The BSP earlier revised upward the BOP surplus projection this year to $3.7 billion, taking into account the expected sustained strength of the domestic economy amid the downward revision in global economic growth outlook.
Other key considerations in the revised BOP projections were the near-term moderation in the global trade outlook, expected decline in commodity prices, possible ratcheting up of trade tensions between the US and China and US Fed’s shift to “dovish” monetary policy stance.
Other factors were the uncertainties over Brexit developments, expected modest rebound in non-resident capital flows to emerging markets and the bright outlook of the domestic economy.
The BOP summarizes the country’s economic transactions with the rest of the world. Persistent BOP surpluses help build up the country’s gross international reserves, an ample supply of which supports the value of the peso against other currencies and helps keep domestic inflation at bay.
The country’s BOP position ended 2018 with a deficit of $2.31 billion.