Balance of payments swings to $627-million surplus in March

MANILA, Philippines — More dollars flowed into the domestic economy in March, the Bangko Sentral ng Pilipinas reported Wednesday.

In a statement, the central bank said the Philippines’ overall balance of payments position posted a surplus of $627 million in March, a reversal from the $266 million deficit recorded in the same month last year. 

“Inflows in March 2019 stemmed mainly from the national government’s net foreign currency deposits and the BSP’s foreign exchange operations and income from its investments abroad,” the BSP said, adding that the influx was partially offset by payments made by the state for its foreign exchange obligations.

The BOP is a summary of the economic transactions of a country with the rest of the world for a specific period.

A surplus arises when more funds entered the country against those that left. The raised funds go to the nation’s international reserves, which the BSP manages as the lender of last resort.

Meanwhile, a deficit is incurred when outflows exceed inflows. When inflows and outflows are equally matched, the BOP position is in balance.

Year-to-date, the country’s BOP position swung to a surplus of $3.8 billion, a turnaround from the $1.23 billion deficit registered in the first quarter of 2018.

“The surplus may be attributed partly to remittance inflows from overseas Filipinos and net inflows of foreign portfolio investments (net BSP-registered transactions based on custodian banks’ reports) for the first two months of the year, and net inflows of foreign direct investments in January 2019,” the central bank said.

According to the BSP, the Philippines’ final gross international reserves level stood at $83.61 billion as of end-March, providing “more than ample liquidity buffer” and is equivalent to 7.4 months’ worth of imports of goods and payments of services.

The international reserves are composed of foreign assets of the BSP held mostly as investments in foreign-issued securities, monetary gold and foreign exchange. — Ian Nicolas Cigaral