Philippines' overall balance of payment position posts US$80mil surplus in June

  • Philippines
  • Friday, 31 Jul 2020

MANILA (Xinhua): The Philippines' overall balance of payments (BOP) position posted a surplus of US$80 million in June, a reversal from the $404 million BOP deficit recorded in the same month last year, the Philippine central bank said on Friday (July 31).

In a statement, the Bangko Sentral ng Pilipinas (BSP) said the BOP surplus in June 2020 reflected mainly the inflows from the national government's foreign loan proceeds that were deposited with the BSP as well as the BSP's income from its investments abroad.

However, the BSP said these inflows were offset by the foreign currency withdrawals made by the national government to pay its foreign currency debt obligations during the month in review.

For the third consecutive month, the BSP said the cumulative BOP position recorded a surplus, registering $4.11 billion in June.

Notwithstanding, the BSP said the six-month cumulative BOP surplus this year was lower than the $4.79 billion surplus recorded a year ago.

"The current BOP surplus was supported mainly by foreign borrowings by the national government, the bulk of which were drawn in the second quarter, along with lower merchandise trade deficit," the BSP said.

It added that these positive outcomes negated fully the impact of higher net outflows of foreign portfolio investments, and lower net inflows from trade in services, personal remittances, and foreign direct investments.

According to the BSP, the BOP position reflects a record high final gross international reserves (GIR) level of $93.47 billion as of end-June 2020.

At this level, the BSP said the GIR represents an ample external liquidity buffer, which can cushion the domestic economy against external shocks.

"This is equivalent to 8.5 months' worth of imports of goods and payments of services and primary income," the BSP added.

Moreover, the BSP said it is also about 7.3 times the country's short-term external debt based on original maturity and 4.8 times based on residual maturity.

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