BOP swings back to surplus in July

The Philippine balance of payments (BOP) position returned to a surplus in July 2019 from a deficit in July 2018, data released by the Bangko Sentral ng Pilipinas (BSP) on Monday showed.

The payments position registered a $248-million surplus, a reversal from a $455-million year-on-year.

This also compares with a $404-million deficit in June this year.

The BOP consists of Philippine transactions with the rest of the world during a specific period. A surplus means more funds entered the country, while a deficit means more funds went out.

“Inflows in July 2019 were reflected in the BSP’s foreign exchange operations and income from its investments abroad as well as in the National Government’s (NG) net foreign currency deposits,” the BSP said in an accompanying statement.

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

Year-to-date, the BOP position swung to a surplus of $5.036 billion versus a deficit of $3.712 billion in the same period in 2018.

“The surplus may be attributed partly to remittance inflows from overseas Filipinos during the first half of the year and net inflows in foreign direct investments during the first five months of the year,” the BSP said.

The payments position reflects the final GIR level of $85.18 billion as of end-July 2019, which is equivalent to 7.4 months’ worth of imports of goods and payments of services and primary income.

It is also equivalent to 5.2 times the country’s short-term external debt based on original maturity, and 3.8 times based on residual maturity. —Jon Viktor Cabuenas/VDS, GMA News