The Philippines posted a balance of payments (BOP) surplus of $6.878 billion as of end September, higher than same time last year of $5.567 billion, the Bangko Sentral ng Pilipinas (BSP) said on Monday.
For the month of September only, the BOP surplus increased to $2.104 billion compared to the $657 million surplus in August, and from just $38 million surplus in the same month in 2019.
In a statement, the BSP attributed the BOP surplus in September to “inflows from the BSP’s foreign exchange operations and income from its investments abroad, and the National Government’s (NG) foreign currency deposits with the BSP.”
The BSP added that “these inflows were partly offset, however, by the NG’s payments of its foreign currency debt obligations.”
For the January-September BOP position, the BSP said the cumulative $6.878 billion “was supported mainly by higher net foreign borrowings by the NG and lower merchandise trade deficit along with sustained net inflows from foreign direct investments, personal remittances, and trade in services.”
The BSP also reported a final gross international reserves (GIR) of $100.44 billion as of end September from $98.95 billion as of end August.
The GIR level is considered “adequate external liquidity buffer” which “can cushion the domestic economy against external shocks,” said the BSP. This means that the current level of reserves “ensures availability of foreign exchange to meet BOP financing needs” such as payment of imports and debt service in “extreme conditions when there are no export earnings or foreign loans.”
Earlier this month, the BSP revised the 2020 BOP surplus projection higher to $8.1 billion from $600 million previous estimate. BOP components such as current account projection was also revised to $6 billion surplus this year from an earlier $1.9 billion deficit forecast.
The BSP said it will continue to improve and to strengthen its surveillance of emerging external sector developments for more accurate projections. It said that it will also closely monitor their possible impact on price and financial stability.