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Philippine BOP surplus hits two-year high in January

The Philippines recorded a two-year high balance of payments (BOP) surplus in January due mainly to the inflows of the net foreign currency deposits with the Bangko Sentral ng Pilipinas (BSP), data released Monday showed.

The central bank said the BOP surplus stood at $3.081 billion in January, the highest in over two years since December 2020. It compares with the $612-billion surplus in December 2022, and the $102-billion deficit in January 2022.

The payments position 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.

“The BOP surplus in January 2023 reflected inflows arising mainly from the national government’s net foreign currency deposits with the BSP, which include proceeds from its issuance of ROP Global Bonds, and net income from the BSP’s investments abroad,” the central bank said in an accompanying statement.

The administration of President Ferdinand “Bongbong” Marcos Jr. in January through the New York bond market launched a $3-billion dollar-denominated bond offering, with a tenor of at least five years.

Latest data available from the Bureau of the Treasury (BTr) showed that the country’s running debt stock stood at P13.42 trillion as of end-November.

The BSP said the latest BOP position also reflects an increase in the final gross international reserves (GIR) level to $100.7 billion from $96.1 billion as of end-December 2022.

“The latest GIR level represents a more than adequate external liquidity buffer equivalent to 7.6 months’ worth of imports of goods and payments of services and primary income,” the BSP said.

The GIR is also estimated to be about 6.2 times the country’s short-term external debt based on original maturity, and 4.1 times based on residual maturity.

Moving forward, Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort said the BOP could continue to grow on the back of several factors.

“For the coming months, BOP data could still be supported by the continued growth in the country’s structural US dollar inflows such as OFW remittances, BPO revenues, exports, foreign investments/FDIs, foreign tourism receipts, among others,” he said in a separate commentary.

Cash remittances or money transfers coursed through banks of overseas Filipinos totaled $3.16 billion in December, bringing the full-year inflows for 2022 to $32.54 billion.

Meanwhile, net inflows of foreign direct investments (FDIs) reported a 43.6% decline to $1.4 billion in November 2022.—LDF, GMA Integrated News