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BOP posts ninth month of surplus in October

The Philippine payments position registered a surplus for the ninth consecutive month in October, mainly from income from investments overseas, the Bangko Sentral ng Pilipinas (BSP) reported Thursday.

Data released by the central bank showed that balance of payments (BOP) position posted a $3.44-billion surplus in October, up from $2.104 billion in September and $163 million in October 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 October 2020 reflected mainly the BSP’s income from its investments abroad, the National Government’s (NG) foreign currency deposits with the BSP, and inflows from the BSP’s foreign exchange operations," the central bank said in an accompanying statement.

Year-to-date, the BOP registered a $10.313-billion surplus in the first 10 months of the year versus the $163-million surplus recorded in the comparable period last year.

"Based on preliminary data, the current BOP surplus was supported mainly by higher net foreign borrowings by the NG and lower merchandise trade deficit along with sustained net inflows from foreign direct investments, personal remittances, and trade in services," the BSP said.

The latest BOP position reflects an increase in the final gross international reserves (GIR t0 $103.8 billion as of end-October 2020, higher than $100.44 billion in end-September, and equivalent to 10.3 months' worth of imports of goods and payments of services and primary income.

It is also about 9.2 times the country's short-term external debt based on original maturity, and 5.4 times based on residual maturity.

"The latest GIR level represents a more than adequate external liquidity buffer, which can cushion the domestic economy against external shocks," the BSP said. — Jon Viktor D. Cabuenas/BM, GMA News