January sees third straight month of BoP surplus, biggest in seven years

By Melissa Luz T. Lopez
Senior Reporter
THE PHILIPPINES’ external position remained in surplus in January, the Bangko Sentral ng Pilipinas (BSP) reported on Tuesday, marking the biggest surfeit in six years amid sustained dollar inflows.
The Philippines’ balance of payments (BoP) position swung to a $2.704-billion surplus in January, marking the third straight month of net inflows, according to latest central bank data.
The surplus is bigger than the $2.442 billion posted in December and turns around from the $531-million deficit in January 2018.
It is also the biggest surplus seen since July 2012, when net dollar inflows reached $3.182 billion.
The BoP measures the country’s transactions with the rest of the world at a given time. A deficit means more money left the economy than what went in, while a surplus shows that more funds entered the Philippines.
In a statement sent late Tuesday, the central bank attributed the sizeable surplus to increased net foreign currency deposits held by the national government.
Foreign portfolio investments received in January also contributed to the BoP level, the BSP added.
The Bureau of the Treasury raised $1.5 billion from the sale of 10-year dollar bonds to foreign investors last month, which is meant to finance the government’s spending plans for 2019.
Meanwhile, the central bank’s foreign exchange operations and income from offshore investments also padded the BoP tally, as this reflects the sharp increase in the country’s dollar reserves.
Gross international reserves amounted to $82.49 billion in January, which was the highest seen since May 2017.
The January BoP compares the $3.5-billion deficit expected by the central bank for the entire year, as well as the $2.306-billion gap incurred in 2018.
The central bank attributed last year’s BoP gap to a growing trade deficit, as imports increased by 13.4% while exports contracted by 1.8%, leaving a $41.44-billion gap in goods trade.
The BSP attributed the surge in imports to the increased demand for raw materials and capital goods needed for business expansion and the government’s stepped-up infrastructure development.