By Lee C. Chipongian
The Bangko Sentral ng Pilipinas (BSP) said the Philippines had a higher-than-projected balance of payments (BOP) surplus for 2019 of $7.84 billion against a $4.8 billion estimate. The 2019 BOP surplus reversed 2018’s $2.31 billion deficit.
According to the BSP, preliminary data showed that “the surplus was supported by higher net receipts of trade in services, personal remittance inflows from overseas Filipinos, and sustained net inflows of foreign direct investments and portfolio investments.”
For the month of December only, the country posted a BOP surplus of $1.57 billion although lower compared to December 2018 with $2.44 billion surplus.
The BSP said inflows in December “reflected the BSP's net foreign exchange purchases from its foreign exchange operations and income from its investments abroad, and increase in the National Government's (NG) net foreign currency deposits.”
The BSP revised its 2019 BOP surplus projection in November and raised it to $4.8 billion from its June forecast of $3.7 billion.
The BSP, however, reported that “These inflows were partially offset, however, by outflows representing payments made by the NG on its foreign exchange obligations during the month in review.”
The central bank said in 2019, the final gross international reserves (GIR) stood at $87.84 billion which was “more-than-ample liquidity buffer” since it is equivalent to 7.7 months' worth of imports of goods and payments of services and primary income and 5.5 times the country's short-term external debt based on original maturity and 4.3 times based on residual maturity.
For this year, the BOP surplus is expected to hit $3 billion while the current account is still seen to be in deficit of $8.4 billion.
BSP Department of Economic Research Director Dennis D. Lapid has said that the BSP based its revised external account estimates for both 2019 and 2020 on some key considerations such as the more subdued global economic growth outlook, softer global trade growth and continued vulnerability of commodity prices.
The US-China trade war is also an uncertainty contributor that could lead to volatility in financial markets.
The 2020 BOP surplus is equivalent to 0.7 percent of GDP while the current account shortfall is -2.1 percent of GDP.