PHL payments surplus contract to $448M in March

The Philippines’ balance of payments (BOP) position stood at a surplus, albeit lower in March, as the amount it earned exceeded what it spent from its transactions with the rest of the world.

Data released by the Bangko Sentral ng Pilipinas (BSP) showed that the BOP amounted to a surplus of $448 million in March, lower than $627 million 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 of payments into and out of a country.

“The BOP surplus in March 2020 reflected mainly the inflows arising from the BSP’s foreign exchange operations as well as income from its investments abroad, and the National Government’s foreign currency deposits with the BSP,” the central bank said.

“These inflows were partially offset, however, by the foreign currency withdrawals made by the National Government to pay its foreign currency debt obligations during the month in review,” it said.

The BOP surplus brought the country’s gross international reserves (GIR) to $88.86 billion as of end-March 2020. 

At such level, the foreign reserves were ample to cover 7.9 months’ worth of imports of goods and services and payments of primary income.

“Further, it is also about 5.3 times the country’s short-term external debt based on original maturity and 3.8 times based on residual maturity,” the BSP said.

The BOP surplus in March reduced the cumulative BOP deficit for the first three months of the year to $68 million from a $516-million deficit recorded in the first two months of the year.

The year-to-date BOP deficit is also a reversal from the $3.8-billion surplus recorded in the first quarter of 2019.

“This development may be attributed partly to the reversal of foreign portfolio investments to net outflows from net inflows in the first quarter of 2019, even as the merchandise trade deficit declined,” the BSP said. -NB, GMA News