PHL payments position swings to surplus in H1

The Philippines’ balance of payments (BOP) swung to a surplus of $4.8 billion in the first half of 2019, the Bangko Sentral ng Pilipinas (BSP) reported on Friday.

The surplus reversed the $3.3-billion deficit posted in the same period last year.

The BOP is a record of all the country’s transactions with the rest of the world in a particular period. It is the difference between payments into and out of a country.

"The surplus was a result primarily of the marked increase in net inflows in financial account combined with the narrowing of the deficit in the current account," the central bank said.

The financial account or net lending by residents from the rest of the world posted a net inflow of $5.7 billion, compared with $2.5 billion net inflow recorded year-on-year.

"This was due to the reversal in portfolio investments to $4.4 billion net inflows from $2.6 billion net outflows, which compensated for lower net inflows in direct investment account of $1.8 billion from $3.7 billion and the reversal of other investment account to net outflows of $496 million from $1.4 billion net inflows," the BSP said.

Meanwhile, the current account—the balance of a country’s import and export of goods and services—posted a narrower deficit of $1.7 billion from $3.8-million deficit last year.

"This developed as a result of higher net receipts in primary income at $2.5 billion from $1.5 billion, trade-in-services at $5.9 billion from $4.9 billion, secondary income accounts at $13.3 billion from $13.2 billion, and as the deficit in the trade-in-goods account posted a marginal increase at $23.5 billion from $23.3 billion," the BSP said.

Resulting from such developments, the country's gross international reserves (GIR) stood at $84.9 billion, higher than $77.5 billion posted in the same period last year.

"At this level, reserves sufficiently covered 7.4 months' worth of imports of goods, and payments of services and primary income," the central bank said.

The GIR for the first half is also equivalent to 5.5 times the country's short-term external debt based on original maturity and 3.9 times based on residual maturity.

"The year-on-year increase in reserves reflected the national government's net foreign currency deposits, inflows from the BSP's foreign exchange operations as well as income from investments abroad, and revaluation adjustments on its foreign currency-denominated reserves," the BSP said.

"This was partially offset by the national government's payments for its foreign exchange obligations," it added. — John Ted Cordero/DVM, GMA News