THE PHILIPPINES continued to get more dollars in November, driving a balance of payments (BoP) surplus that was the biggest in six months but still smaller than a year ago, the Bangko Sentral ng Pilipinas (BSP) said in a press release on Thursday.

Central bank data showed the BoP — a summary of the country’s economic transactions with the rest of the world within a given period — in surplus for the fifth straight month at $541 million in November, the biggest surfeit since May’s $928 million though 36% smaller than the $847 million recorded in November 2018.

The central bank said that November dollar inflows reflected the “BSP’s foreign exchange operations, increase in the national government’s (NG) net foreign currency deposits and BSP’s income from its investments abroad.”

“These inflows were offset, however, by outflows representing payments made by the [national government] on its foreign exchange obligations during the month in review.”

UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said uncertainties from lingering global tensions capped inflows.

“Uncertainties brought by the US-China trade tussle have consistently and partly affected Philippine balance of payments,” Mr. Asuncion said in an e-mail when sought for comment.

“In addition, the lower-than-expected trade balance deficit has shown the challenge of institutional execution, as seen from the delay in the passage of the 2019 national budget, hindering the growth of imports and, consequently, capital accumulation.”

This year has seen the BoP for most part turn around from successive deficits in 2018’s first 10 months, with a $6.271-billion surplus as of November compared to the $4.747-billion deficit in last year’s comparative 11 months. “The surplus may be attributed partly to lower trade-in-goods account deficit, higher net receipts in the trade-in-services account and personal remittance inflows from overseas Filipinos, and net inflows of foreign direct investments and foreign portfolio investments,” the BSP said in its statement.

The BSP has updated its 2019 BoP surplus projection to $4.8 billion from the $3.7 billion it penciled in May.

Sought separately for comment, ING Bank-NV Manila Senior Economist Nicholas Antonio T. Mapa said “…likely the most telling reason for the absolute turnaround in BoP has been the positive financial account with financial sector confidence at a high, in stark contrast to the 2018 episode which saw bout after bout of net foreign selling, with the US Fed(eral) Reserve hiking (interest rates) aggressively.”

Also noting this year’s successive surpluses, Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said in an e-mail that “on a year-to-date basis, overseas borrowings by both the government and the country’s biggest private firms increased amid near-record-low interest rates that made long-term borrowings more compelling.”

But a surplus is not always a “welcome” development, UnionBank’s Mr. Asuncion said.

“At a time when the economy is focusing on infrastructure development spurred by government spending, a trade balance surplus is the least expected result. Thus, this may imply an economy not working its full potential,” he explained.

Security Bank Corp. Chief Economist Robert Dan J. Roces cited a higher GIR that “pushed the BoP surplus higher.”

Gross international reserves (GIR)stood at $86.23 billion as of end-November, which the BSP described as “a more-than-ample liquidity buffer equivalent to 7.5 months’ worth of imports of goods and payments of services and primary income” and equivalent to 5.4 times the country’s external debt falling due within 12 months and 4.2 times such foreign liability plus principal payments on medium- and long-term loans of the public and private sectors falling due within a year.

RCBC’s Mr. Ricafort said both BoP and GIR data lend strength to the peso, which ended Thursday at P50.635 to the greenback, 3.7% stronger than its P52.58-per-dollar finish last year. “Relatively strong BoP data and record-high GIR data would provide greater buffer on the peso exchange rate and further bolster the strength of the country’s overall external position, which has partly supported upgrades on the country’s credit ratings in recent years,” he said.

Mr. Roces sees “higher net receipts due to increased remittances during the rest of the holiday season.”

“Downside risks, however, remain from lower FDI (foreign direct investments) due to a global slowdown,” he added, referring to FDI net inflows’ 36.9% drop to $5.118 billion in the nine months to September. — Luz Wendy T. Noble

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