BOP posts surplus for 7th straight month

MANILA, Philippines — The Philippines continued to register strong inflows resulting to a surplus in the balance of payments (BOP) position for the seventh straight month with $928 million in May, reversing the $583 million deficit booked in the same month last year.

The Bangko Sentral ng Pilipinas (BSP) said inflows in May stemmed mainly from the national government’s net foreign currency deposits and the central bank’s foreign exchange operations and income from its investments abroad.

The central bank added the strong inflows were offset partially by the payments made by the national government for its foreign exchange obligations during the month in review.

The Philippines has been booking surpluses since November last year due to strong foreign exchange inflows.

The BOP is the difference in total values between payments into and out of the country over a period.

A surplus means more foreign exchange flowed into the country from exports, remittances from overseas Filipinos, business process outsourcing earnings and tourism receipts than what flowed out to pay for the importation of more goods, services, and capital.

For the first five months of the year, the Philippines booked a BOP surplus of $5.19 billion reversing the $2.08 billion deficit recorded in the same period last year.

“The surplus may be attributed partly to remittance inflows from overseas Filipinos during the first four months of the year, and net inflows of foreign portfolio, foreign direct and other investments in the first quarter of 2019.

Latest data showed personal remittances composed of cash and non-cash items that flow through both formal or via electronic wire and informal channels such as money or goods carried across borders rose 3.7 percent to $10.81 billion from January to April this year compared to $10.43 billion in the same period last year.

On the other hand, cash remittances coursed went up by 4.1 percent to $9.7 billion in the first four months of the year from $9.4 billion in the same period last year.

Net foreign direct investment inflows slipped by 15.1 percent to $1.94 billion in the first quarter of the year from $2.28 billion in the same quarter last year due to lower equity placements from foreign investors.

On the other hand, the Philippines booked a sharp decline in net inflow of foreign portfolio investments or hot money to $64 million in the first four months of the year compared to a net inflow of $1.05 billion in the same period last year.

The BSP now expects the Philippines to book a BOP surplus of $3.7 billion this year, reversing the $2.3 billion deficit recorded last year. The projected surplus this year is also a complete reversal of the projected BOP deficit of $3.5 billion as of November last year.