Philippine payments position posts fifth month of surplus —BSP

The Philippine balance of payments (BOP) position registered a surplus for the fifth consecutive month in June, albeit lower than the previous month, the Bangko Sentral ng Pilipinas (BSP) reported Thursday.

According to data released by the central bank, the BOP position registered an $80-million surplus in June. This compares with the $2.431-billion surplus in May and the $404-million deficit in June 2019.

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.

"The BOP surplus in June 2020 reflected mainly the inflows from the National Government’s (NG) foreign loan proceeds that were deposited with the BSP as well as the BSP’s income from its investments abroad," the BSP said in an accompanying statement.

According to the latest data available from the Bureau of the Treasury (BTr), the national government's outstanding debt swelled to a record P9.054 trillion as of end-June.

"These inflows were offset, however, by the foreign currency withdrawals made by the NG to pay its foreign currency debt obligations during the month in review," the central bank said.

The latest figures brought the year-to-date BOP position to a $4.11-billion surplus, lower than the $4.79-billion surplus recorded a year ago.

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

"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," it added.

The BOP position reflects a record-high final gross international reserves (GIR) level of $93.47 billion as of end-June, equivalent to 8.5 months' worth of imports of goods and payments of services and primary income.

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.

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