The country’s balance of payments surplus exceeded $10 billion in the first 10 months and surpassed the full-year target of an $8.1-billion surplus, Bangko Sentral ng Pilipinas Governor Benjamin Diokno said Thursday.
Diokno said in a statement the BOP surplus hit $3.44 billion in October and $10.31 billion in the first 10 months.
“The surplus reflected mainly the BSP’s income from investments abroad, the national government’s foreign currency deposits with the BSP and inflows from the foreign exchange operations. These were partly offset by the government’s payments of its foreign currency debt obligations,” Diokno said.
The cumulative surplus was also higher than the $5.73-billion surplus recorded a year ago. The BOP position reflected an increase in gross international reserves to $103.8 billion at the end of October.
The BSP expects larger BOP surplus and gross international reserves for 2020 and 2021, taking into consideration the expected recovery of the global economy from the impact of the COVID-19 pandemic.
The Monetary Board earlier approved the upward revision in the BOP surplus to $8.1 billion (2.2 percent of GDP) in 2020 from the previous estimate of $600 million (0.2 percent of GDP) surplus for the year.
Diokno said the new set of forecasts considered the latest available BOP data in the first half and the global and domestic economic developments, including the macroeconomic impact of the pandemic.
He said the global economy was showing signs of recovery but remained susceptible to setbacks, while the domestic economy was slowly lifting its way out of containment measures.
Diokno said that while uncertainty continued to weigh down on business and investor confidence, factors such as expectations of a better-than-initially-anticipated global economic performance for the year; the reopening of advanced economies with investment interests in the Philippines; the country’s investment-grade credit standing; and its expected gradual economic recovery were also seen to support foreign investment inflows for the rest of the year.
The end-2020 GIR level is expected to remain above $100 billion, taking into account the increased foreign borrowings by the national government and the revaluation adjustments arising from the accounting treatment of the BSP’s gold holdings.
For 2021, the BOP position is seen to remain in surplus but at a lower level of $3.4 billion or 0.9 percent of GDP, reflecting the lower forecasted current account surplus of $3.1 billion (0.8 percent of GDP) amid an expected widening of trade deficit.
The 2021 GIR level is also seen to reach $102 billion in anticipation of continued national government foreign currency deposits and positive revaluation adjustments of gold holdings as gold prices could remain elevated next year on safe-haven investor demand.