The Philippines registered a higher balance of payments (BOP) surplus of $1.592 billion as of end-August from $1.504 billion in end-July amid sustained net inflows and a narrowing trade gap, according to the Bangko Sentral ng Pilipinas (BSP).
The BOP which is a summary of the economic transactions of a country with the rest of the world for a specific period, was higher in end-August 2023. The BOP surplus totaled $2.15 billion same time last year.
Meanwhile, for the month of August only, the BSP reported a modest BOP surplus of $88 million, up from $62 million in July. This was a reversal from the $57 million deficit in August 2023.
A BOP surplus position means there are more exports or inflows than imports or outflows while a deficit position is the opposite.
The central bank said as of end-August, the country’s final gross international reserves (GIR) was actually higher at $107.857 billion compared to what was reported earlier this month of $106.737 billion.
The BSP releases the GIR numbers twice in a month, as a preliminary report and as a final tally. The final report is released along with the latest BOP statistics.
The BSP said the small BOP surplus in August mainly came from inflows such as BSP’s net income from its overseas investments.
As to the cumulative January-August surplus, this was due mainly from the narrowing trade in goods deficit; the continued net inflows from personal remittances; trade in services; net foreign direct investments; net foreign borrowings by the National Government; and net foreign portfolio investments.
Based on Philippine Statistics Authority initial data, the country recorded a trade deficit of $29.9 billion for the first seven months, lower compared to same period last year of $31.8 billion.
The last time the BSP’s policy-making arm, the Monetary Board, revised the BOP forecasts for 2024 and 2025 was in June this year.
For 2024, the BSP forecasts a higher BOP surplus of $1.6 billion versus its March estimate of only $700 million.
For 2025, the BSP is projecting $1.5 billion BOP surplus, an improvement from its previous estimate of $500 million deficit.
The BSP also forecasts GIR will hit $104 billion by the end of this year and $105 billion in 2025.
The latest GIR level of $107.857 billion is “more than adequate external liquidity buffer,” according to the BSP. It is equivalent to 7.8 months’ worth of imports of goods and payments of services and primary income. It is also six times the country’s short-term external debt based on original maturity and 3.8 times based on residual maturity.