MANILA – The Philippines posted a USD1.2-billion balance of payments (BOP) surplus in March this year, the Bangko Sentral ng Pilipinas (BSP) said on Friday.
Data showed that the BOP surplus last month was slightly lower than the USD1.3 billion surplus recorded in March last year.
"The BOP surplus in March 2024 reflected inflows arising mainly from the National Government’s (NG) net foreign currency deposits with the Bangko Sentral ng Pilipinas (BSP) and net income from the BSP’s investments abroad," said the central bank.
The BOP is a summary of the economic transactions of a country with the rest of the world for a specific period.
The overall position can be in surplus, deficit, or balance.
For the first quarter of the year, the BOP level was at USD238-million surplus, lower than the USD3.5-billion surplus recorded in January to March 2023.
"Based on preliminary data, this cumulative BOP surplus reflected mainly the improvement in the balance of trade alongside the net inflows from personal remittances, net foreign borrowings by the NG, foreign direct investments, and foreign portfolio investments," said the BSP.
Data from the Philippine Statistics Authority showed that the country's trade deficit went down to USD8 billion for the first two months of the year from the USD9.4 billion deficit posted from January to February 2023.
The BSP said the BOP position reflects an increase in the final gross international reserves (GIR) level to USD104.1 billion from USD102 billion as of the end of February 2024.
The latest GIR level represents a more-than-adequate external liquidity buffer equivalent to 7.7 months’ worth of imports of goods and payments of services and primary income.
Moreover, it is also about 5.9 times the country’s short-term external debt based on original maturity and 3.7 times based on residual maturity.
Rizal Commercial Banking Corporation chief economist Michael Ricafort said the latest BOP surplus data was the highest since October last year.
"Going forward, any improvement in BOP data and in GIR data for the coming months could still help provide greater cushion for the peso exchange rate vs the US dollar, especially versus any speculative attacks," said Ricafort.
Ricafort said this would also help strengthen the country's external position that, in turn, also supports the relatively favorable credit ratings of 1-3 notches above the minimum investment grade which has been sustained despite the Covid-19 pandemic that started in 2020. (PNA)
