BOP surplus highest in 7 years

MANILA, Philippines — The country enjoyed a surplus in its balance of payments (BOP) amounting to $7.84 billion last year, the highest in seven years, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

According to the BSP, the country’s BOP surplus for full-year 2019 reached $7.84 billion, a reversal of the $2.31 billion deficit recorded in the previous year.

This is the highest BOP surplus since it reached $9.24 billion in 2012. It is also two times higher than the $3.7 billion surplus projected by the BSP for this year.

“Based on preliminary data, the surplus was supported by higher net receipts of trade in services, personal remittance inflows from overseas Filipinos, and sustained net inflows of foreign direct investments and portfolio investments,” the BSP said.

The BOP is the difference in total values between payments into and out of the country over a period.

A surplus means more foreign exchange flowed in from exports, remittances from overseas Filipinos, business process outsourcing earnings and tourism receipts than what flowed out to pay for the importation of goods, services and capital.

For December alone, the overall BOP position recorded a $1.57 billion surplus, lower than the $2.44 billion surplus recorded in the same month in 2018.

“Inflows in December 2019 reflected the BSP’s net foreign exchange purchases from its foreign exchange operations and income from investments abroad as well as the increase in the national government’s net foreign currency deposits,” the central bank said.

“These inflows were partially offset, however, by outflows representing payments made by the NG on its foreign exchange obligations during the month in review,” it said.

According to the BSP, the country’s BOP position reflects its gross international reserves (GIR) level of $87.84 billion as of end-December 2019. This provides the country an ample liquidity buffer equivalent to 7.7 months’ worth of imports of goods and payments of services and primary income.

It is also equivalent to 5.5 times the country’s short-term external debt based on original maturity and 4.3 times based on residual maturity.

According to the latest data from the BSP, personal remittances in November 2019 rose by two percent to $2.64 billion from $2.59 billion in the same period in 2018. This was the slowest growth in remittances since June last year.

For the first 11 months of 2019, personal remittances rose by 4.1 percent to $30.25 billion from $29.06 billion in 2018.