Philippine posts $2.1 billion BOP surplus in September

MANILA, Philippines — The country’s overall balance of payments (BOP) position posted a surplus of $2.1 billion in September, bringing the year-to-date surplus position to $6.88 billion, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

The latest figure reflected mainly the inflows from the BSP’s foreign exchange operations and income from its investments abroad, and the national government’s foreign currency deposits with the BSP.

These inflows were partly offset, however, by the national government’s payments of its foreign currency debt obligations, the BSP said.

The cumulative BOP surplus of $6.88 billion was higher than the $5.57 billion surplus recorded in the same period a year ago.

Based on preliminary data from the BSP, the current BOP surplus was supported mainly by higher net foreign borrowings by the national government and lower merchandise trade deficit along with sustained net inflows from foreign direct investments, personal remittances, and trade in services.

According to the BSP, the latest BOP position reflects an increase in the final gross international reserves (GIR) level of $100.44 billion as of end-September compared with $98.95 billion as of end-August.

At $100.44 billion, the GIR represents a more than adequate external liquidity buffer, which can cushion the domestic economy against external shocks.

This is equivalent to 10 months’ worth of imports of goods and payments of services and primary income. Moreover, it is also about nine times the country’s short-term external debt based on original maturity and 5.4 times based on residual maturity.

BOP summarizes the balance of a country’s transaction with the rest of the world.

The surplus in the BOP position also bolsters the country’s GIR which, in turn, supports the peso.

The peso continued to strengthen against the dollar, gaining another 0.085 centavos to close at 48.395 at yesterday’s trading from Friday’s 48.480 to $1.