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Philippines:BoP surplus plummets to 9-mo low last month

Source: The Manila Times    Time:2020-07-31 10:05:06
THE country’s balance of payments (BoP) posted a surplus of $80 million last month — its lowest in nine months — keeping the year-to-date tally above $4 billion, according to the Bangko Sentral ng Pilipinas (BSP).

Central bank data showed on Thursday that the June amount was smaller than May’s $2.43-billion surplus and a turnaround of the $404-million shortfall a year ago. It was also the smallest since the $38-million surplus last September.

In a statement, the BSP said the latest surplus “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.”

“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,” it added.

While the June figure boosted the first-semester surplus to $4.10 billion, it remains lower than the $4.78-billion surplus in the same period a year ago.

The tally is, nevertheless, wider than the Bangko Sentral’s revised forecast of a $600-million surplus for this year.

“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 [a] lower merchandise trade deficit,” the central bank said.

The Bureau of the Treasury earlier reported that the government’s external debt accelerated by 0.3 percent to P2.86 trillion at end-June.

Latest data from the Philippine Statistics Authority showed that the country’s trade gap plunged by 44.7 percent to $9.84 billion in the first five months of 2020 from the $17.78-billion shortfall a year ago.

“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 (FDI),” the Bangko Sentral said.

Hot money stayed in the negative territory in the first six months of the year, with net outflows at $3.3 billion, 357.69 percent bigger than the year-earlier figure.

Personal remittances — personal transfers, whether in cash or kind, and capital transfers between households — settled at $10.49 billion in the first four months of 2020, a 2.9-percent decline from $10.81 billion in January to April 2019.

Net inflows of FDI in the four months ending April hit $1.98 billion, 32.1 percent smaller than the year-ago amount.

The payments balance position reflected the final gross international reserves (GIR) level of $93.47 billion as of the end of last month.

This level “represents an ample external liquidity buffer, which can cushion the domestic economy against external shocks,” the BSP said.

The final GIR is 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.

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