By Lee C. Chipongian
The country’s balance of payments (BOP) surplus increased to $3.170 billion as of end-February, reversing the previous year’s $961 million shortfall.
This is the second month that the BOP reported an excess. For the month of February, the Bangko Sentral ng Pilipinas (BSP) announced a surplus of $467 million, also reversing the $429 million deficit same time last year.
In a statement, the BSP said the cumulative surplus “may be attributed partly to remittance inflows from overseas Filipinos in January 2019 and net inflows of foreign portfolio investments (net BSP-registered transactions based on custodian banks’ reports) for the first two months of the year, which was a reversal of the net outflows reported in January-February 2018.”
The BSP also said inflows which propped up the BOP for the month of February alone came from the central bank foreign exchange operations, as well as from the National Government’s (NG) net foreign currency deposits, and BSP’s income from its investments abroad.
The BOP was in surplus despite NG payments for past loans maturing in February.
The BSP also reported the final gross international reserves (GIR) level which was $82.78 billion as of end-February.
The BSP said the GIR is still considered “more than ample liquidity buffer” against external shocks. At this level, it is equivalent to 7.3 months’ worth of imports of goods and payments of services and primary income, about 5.2 times the country’s short-term external debt based on original maturity and 3.6 times based on residual maturity.
For 2019, the BSP projects a BOP deficit of $3.5 billion.
Last year, the BOP shortfall increased to $2.30 billion from $863 million in 2017. However, the end-2018 deficit was lower than what the BSP projected of $5.5 billion, mainly due to foreign exchange buying by the central bank, which boosted the US dollar buffer fund.
In a report last Friday, the BSP said the BOP remained in deficit in 2018 because of the rise in the current account deficit as the trade-in-goods deficit continued to widen. The current account deficit ballooned to $7.9 billion last year, the highest since 1997.