THE country’s balance of payments (BoP) position remained at a surplus for the eighth consecutive month in September, supported by the central bank’s foreign exchange operation and profits from investments abroad.

In a statement, the Bangko Sentral ng Pilipinas (BSP) said the BoP surplus stood at $2.104 billion in September, ballooning from the $38-million surplus in the same month in 2019. This was also 220% higher than the $657-million surfeit posted in August, and the highest since May’s $2.431 billion.

“The BoP surplus in September 2020 reflected mainly the inflows from the BSP’s foreign exchange operations and income from its investments abroad, and the National Government’s (NG) foreign currency deposits with the BSP. These inflows were partly offset, however, by the NG’s payments of its foreign currency debt obligations,” the central bank said.

The BoP portrays the country’s economic transactions with the rest of the world within a given period.

In the first nine months of 2020, the BoP posted a surplus of $6.88 billion, 24% higher than the $5.57 billion during the same period a year ago.

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

Foreign borrowings have surged 85% to P509.69 billion in August year to date, data from the Bureau of the Treasury showed.

Meanwhile, the trade deficit slimmed to $14.61 billion as of August year to date from the $27.071-billion deficit in the comparable period of 2019.

Latest data from the BSP showed foreign direct investments (FDI) grew 35% year on year to $797 million in July, marking its third straight month of growth and its highest since the $1.153 billion logged in December last year. However, FDI inflows are still down by 11% in the first seven months of the year to $3.795 billion.

Earlier this month, the BSP upwardly revised its BoP projections to a surplus of $8.1 billion this year, from the $600-million surfeit it penciled in last May. The latest projection is equivalent to 0.6% of the gross domestic product (GDP).

The September BoP position also reflects a final gross international level of $100.44 billion as of end-September, inching up by 1.5% from the $98.95-billion level the prior month.

“This is equivalent to 10 months’ worth of imports of goods and payments of services and primary income,” the BSP said.

“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,” it added.

A wider surplus is likely in the last few months of 2020, supported by the seasonal increase in cash remittances from overseas Filipino workers, said Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.

Cash remittances slipped 2.6% to $19.285 billion in the first eight months of 2020. The BSP expects cash remittances to drop by 2% this year due to the impact of the pandemic.

“The BoP surplus could also be sustained amid continued narrower trade deficit recovery in imports, and additional dollar borrowings by the National Government to partly finance various COVID-19 programs as well as more infrastructure projects,” Mr. Ricafort said.

The government expects to borrow $3 trillion this year from both domestic and foreign sources to boost its funding meant for the crisis response. —  Luz Wendy T. Noble