Gov't loan proceeds feed into Philippines' dollar surplus in August
MANILA, Philippines — Dollars that entered the economy continued to exceed those that headed for the exit in August, boosting the country's external position in the face of coronavirus pandemic.
The country's balance of payments (BOP) position remained in surplus for the seventh straight month in August to hit $657 million, the Bangko Sentral ng Pilipinas (BSP) reported Monday.
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 economy against those that left. In a statement, the BSP attributed the surfeit in August to earnings from its investments abroad and foreign exchange operations.
That added to the year-to-date dollar surplus worth $4.77 billion, smaller compared to $5.53 billion surplus a year ago but well-above the central bank's BOP forecast of $600 million by yearend.
According to the BSP, the sustained BOP surplus was expected as state foreign borrowings to shoulder pandemic response costs added dollar inflows. On the other hand, fewer dollars have been flying out due to tepid imports.
The combined effect of the two was enough to offset an exodus of short-term funds and lower foreign direct investments, trade in services and remittances, central bank said.
At this level, the country's dollar reserves that can be used in times of financial stress hit a fresh peak of $98.95 billion as of August, which is enough to pay 9.8 months worth of imports.
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