BOP surplus climbs to four-month high in September

The Philippine balance of payments (BOP) position registered a $2.104-billion surplus in September, the highest in four months, the Bangko Sentral ng Pilipinas (BSP) reported Monday.

Data released by the central bank showed the BOP registered a surplus for the eighth consecutive month in September, which compares with the $657-million surplus in August and the $38-million surplus in September last year.

The BOP consists of Philippine transactions with the rest of the world during a specific period. A surplus means more funds entered the country, while a deficit means more funds exited.

"The BOP surplus in September 2020 reflected mainly the 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 said in an accompanying statement.

The last inflows brought the year-to-date surplus to $6.878 billion, higher than the $5.567-billion surplus in the comparable period in 2019.

"Based on preliminary data, the current BOP surplus 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 said.

The latest BOP reflects an increase in the final gross international reserves (GIR) level of $100.44 billion from the $98.95 billion in August, which the BSP says is equivalent to 10 months' worth of imports of goods and payments of services and primary income.

It is also about 9 times the country's short-term external debt based on original maturity, and 5.4 times based on residual maturity.

"At $100.44 billion, the GIR represents a more than adequate external
liquidity buffer, which can cushion the domestic economy against external shocks," the BSP said.

Earlier this month, the BSP said it now expects the BOP position at an $8.1-billion surplus this year, higher than the $600-million projection in May. — BM, GMA News