Philippines posts $2.61 billion surplus in April

MANILA, Philippines — The country’s balance of payments (BOP) position posted a surplus in April, reversing the deficits booked since the start of the year as more dollars flowed into the country due to higher borrowings to fight the pandemic, according to the Bangko Sentral ng Pilipinas.

BSP Governor Benjamin Diokno said the country recorded a BOP surplus of $2.61 billion in April, 56.7 percent higher than the $1.67 billion surplus recorded in the same month last year.

This was also the highest since the $4.24 billion BOP surplus recorded in December last year.

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

A surplus means more dollars flowed into the country from exports, remittances from overseas Filipino workers (OFWs), business process outsourcing earnings and tourism receipts than what flowed out to pay for the importation of more goods, services and capital.

Diokno said the BOP surplus in April was due to inflows arising mainly from the proceeds of the national government’s global and samurai bond issuances that were deposited with the BSP.

The Philippines returned to the Japanese debt market and raised $500 million through the issuance of samurai or yen-denominated bonds for a robust and sustainable recovery from the economic turmoil brought about by the COVID-19 pandemic.

The country last tapped the Japanese debt market in August 2019 when it raised $855.6 million via the issuance of multi-tenor samurai bonds.

It also raised another $2.52 billion (2.1 billion euros) via a triple-tranche euro-denominated bond offering also in April.

The surplus in April helped trim the BOP deficit in the first four months to about $231 million from a high of $2.84 billion in end- March.

The country has been booking a BOP deficit since the start of the year with $752 million in January, $2.02 billion in February, and $73 million in March.

“Notwithstanding, the current year-to-date BOP level is a reversal of the $1.6 billion surplus recorded in the same period a year ago. Based on preliminary data, this cumulative BOP deficit was partly due to the country’s merchandise trade deficit and net outflows of foreign portfolio investments,” Diokno said.

Latest data from the Philippine Statistics Authority (PSA) showed the country’s trade deficit narrowed by 5.3 percent to $8 billion in the first quarter from $8.45 billion in the same quarter last year.

The central bank is looking at a better BOP surplus of $6.2 billion or 1.6 percent of gross domestic product (GDP) instead of $3.3 billion or 0.8 percent of GDP this year and $3.8 billion or 0.9 percent of GDP for next year.