THE country’s balance of payments (BoP) swung to a surplus in July, a reversal from the deficit recorded a month and a year earlier, the Bangko Sentral ng Pilipinas (BSP) reported on Monday.
Meanwhile, the country’s gross international reserves (GIR) increased to $106.7 billion as of end-July from $105.2 billion a month earlier.
Last month’s $62-million BoP surplus is a reversal from June’s $155-million shortfall and last year’s deficit of $53 million.
The surplus, the central bank said, was driven mainly by net income from its investments abroad and the national government’s (NG) net foreign currency deposits with the BSP.
Year to date, the BoP position remained at a surplus of $1.5 billion but was lower than the $2.2 billion recorded in January–July 2023.
This was mainly due to the “narrowing trade in goods deficit alongside the continued net inflows from personal remittances, net foreign direct investment, trade in services, net foreign borrowings by the NG, and net foreign portfolio investments,” the BSP said.
The BSP also reported that the country’s GIR went up to $106.7 billion as of end-July from $105.2 billion a month earlier.
The level was said to represent “a more than adequate external liquidity buffer equivalent to 7.9 months’ worth of imports of goods and payments of services and primary income.”
“It is also about 6.1 times the country’s short-term external debt based on original maturity and 3.8 times based on residual maturity,” the BSP added.
Sought for comment, Rizal Commercial Banking Corp. chief economist Michael Ricafort said that the latest BOP and GIR data may also reflect the ongoing growth in structural US dollar inflows, including remittances, business process outsourcing (BPO) revenues, exports, foreign investments, and tourism.
“For the coming months, BOP data could still improve with the continued increase in the country’s structural inflows as the economy reopens/recovers further towards greater normalcy,” Ricafort said.
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