BOP reverses to surplus end Oct.

Published November 23, 2021, 11:16 PM

by Lee C. Chipongian

The country’s balance of payments (BOP) position was in surplus of $476 million as of end-October, the first time BOP was in excess this year, based on Bangko Sentral ng Pilipinas (BSP) data.

MB file

The cumulative positive BOP was due to the $1.14 billion surplus for the month of October. This was only the fourth time that a surplus was recorded on a monthly basis, after April’s $2.61 billion, July’s $642 million and August’s $1.04 billion.

The end-October $476 million BOP surplus was however significantly lower compared to the $10.31 billion surplus same time in 2020.

“Based on preliminary data, this cumulative BOP surplus was partly attributed to net inflows from personal remittances, net foreign borrowings by the NG (National Government), foreign direct investments, and trade in services,” said the BSP. The NG deposited $1.59 billion in the BSP from its Retail Onshore Dollar Bonds during the period.

As for the BOP surplus in October only, the BSP said this “reflected inflows arising mainly from the NG’s net foreign currency deposits with the BSP and the BSP’s income from its investments abroad.”

The BSP late Tuesday, Nov. 23, also announced the final gross international reserves (GIR) of $107.89 billion as of end-October, up from end-September’s $106.60 billion.

The BSP reports the GIR twice in a month, the first report which was a preliminary number is usually announced on the second week of every month. The difference is not that significant. The initial GIR report as of end-October was $107.95 billion.

The BOP report is a comprehensive review of the country’s current account or the trade-in-goods and services, income, and current transfers, as well as the capital and financial accounts which are direct, portfolio and other investments.

Despite that for most of the year or from January to September the cumulative BOP was in deficit, the government forecasts BOP to end 2021 in a surplus position of $4.1 billion. For 2022, the BSP expects a BOP surplus of $1.7 billion.

The country’s GIR is projected to climb by as much as $114 billion by end-2021 and $117 billion by 2022. These GIR forecasts are considered as conservative.