Philippines balance of payments closes 2020 with all-time high $16.02 billion

The Philippine balance of payments (BOP) position reported a $4.24-billion surplus in December 2020 to bring the full-year surplus to an all-time high of $16.02 billion, data released by the central bank on Monday showed.

The Bangko Sentral ng Pilipinas (BSP) said the surplus in December reflected inflows mainly from foreign exchange operations and income from its investments abroad, as well as the national government's foreign currency deposits with the central of proceeds from the issuance of ROP Global Bonds.

These inflows were partly offset, however, by the national governments' payment of its foreign currency debt obligations.

The monthly figure compares with the $1.473-billion surplus in November, and $1.572 billion in December 2020; while the full-year figure is over double the $7.84-billion surplus in 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 left.

"Higher net foreign borrowings by the NG and lower merchandise trade deficit, along with sustained net inflows from personal remittances, foreign direct investments, and trade in services accounted for the favorable performance in 2020," the BSP said.

The latest BOP position reflects an increase in the final gross international reserves to $110.12 billion as of end-December 2020 from $104.82 billion in November, equivalent to 11.8 months' worth of imports of goods and payments of services and primary income.

It is also about 9.5 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 an adequate external liquidity buffer, which can help cushion the domestic economy against external shocks," the BSP said. -NB, GMA News