The Bangko Sentral ng Pilipinas (BSP) said the country’s balance of payments (BOP) surplus reached $4.117 billion for the first seven months of this year, after posting a flat $8 million surplus in July.
The BSP also reported a final gross international reserves of $98.6 billion which is a record high as of end-July.
In a statement, the BSP noted: “For the fourth consecutive month, the cumulative BOP position recorded a surplus, registering $4.12 billion in July. Notwithstanding, this cumulative BOP surplus was lower than the $5.04 billion surplus recorded for the same period a year ago. The current BOP surplus was supported mainly by foreign borrowings of the National Government (NG) the bulk of which were drawn in April up to July, and the lower merchandise trade deficit.”
The BSP also said that the BOP surplus “negated fully” the impact of higher net outflows of foreign portfolio investments, and lower net inflows from foreign direct investments, trade in services, and personal remittances.
For the July only BOP of $8 million which was lower than same time last year of $248 million BOP surplus, this was because of inflows coming from the NG foreign loans deposited with the BSP and other income from the central bank’s investments abroad. “These inflows were offset, however, by the foreign currency withdrawals made by the NG to pay its foreign currency debt obligations during the month in review,” said the BSP.
Because of the COVID-19 pandemic which affected economic activity both globally and locally, the BSP expects a lower BOP surplus of only $600 million from its previous projection of $2.9 billion pre-pandemic.
The BOP surplus projection is 0.2 percent of GDP. The reduced BOP estimate was based on the anticipated lower overall foreign exchange inflows from both the current and financial accounts, said the BSP.Last year the BOP position was at $7.843 billion surplus, reversing 2018’s $2.306 billion deficit.
As for the GIR, the BSP projection for this year is $90 billion which has already been surpassed mainly because of gold reserves revaluation. This was more than actual reserves recorded in 2019 of $87.8 billion.