THE country’s balance of payments (BoP) position remained at a surplus for the 10th straight month in November, albeit narrower than the previous month due to foreign currency withdrawals by the National Government, the central bank said on Monday.

In a statement, the Bangko Sentral ng Pilipinas (BSP) said the November BoP — a measure of the country’s transactions with the rest of the world — stood at a surplus of $1.47 billion, up 171% from $541 million in November 2019.

However, this was slimmer than the $3.44-billion surplus in October, which was a 10-year high.

“The BoP surplus in November 2020 reflected inflows mainly from the BSP’s foreign exchange operations and income from its investments abroad. These inflows were partly offset, however, by the foreign currency withdrawals the National Government made to pay its foreign currency debt obligations,” the BSP said.

November brought the year-to-date BoP surplus to $11.79 billion, up by 88% from the BoP surplus of $6.27 billion a year ago, supported by higher foreign borrowings by the National Government and the lower merchandise trade deficit.

The 11-month total already exceeded the $7.843 billion BoP surplus for the full year 2019.

The central bank forecasts a BoP surplus of $8.1 billion by yearend which is equivalent to 0.6% of gross domestic product.

The BSP said the November surplus was supported by higher foreign debt obtained by the government and the continued net inflows from remittances, foreign direct investments and trade in services.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort attributed the BoP surplus to the “narrower trade deficit/net imports about $1 billion-$2 billion per month since the COVID-19 pandemic; as exports back to pre-COVID-19 levels and among record highs; while recovery in imports remained relatively slower among 2.5-year lows; thereby fundamentally leading to relatively higher BOP surplus and GIR in recent months.”

Mr. Ricafort expects the BoP position to remain in a  surplus in the coming months as the trade deficit continues to narrow as economic recovery remains sluggish, government borrows more from foreign lenders and private companies tap external markets to raise more funds.

The foreign trade deficit went down to $1.777 billion in October from $1.783 billion the month prior and $3.573 billion a year ago after exports slipped by 2.2% while imports declined for the 18th straight month by 20%.

The expected seasonal increase in remittances from overseas Filipino workers (OFWs) also contributed to the ballooning BoP surplus and will continue to do so during the holidays, Mr. Ricafort added.

Last month’s BoP position also reflects a final gross international reserves (GIR) level of $104.8 billion, up 0.68% from $103.8 billion at the end of October.

“The latest GIR level represents an adequate external liquidity buffer, which can help cushion the domestic economy against external shocks,” the central bank said.

The BSP estimated that the GIR is equivalent to 11.2 months’ worth of imports of goods and payments of services and primary income, or 9.2 times the country’s short-term foreign debt based on original maturity.

“Going forward, the sustained BoP surpluses may lead to new record high GIR well above the latest new record high of $104.5 billion in the coming months, thereby providing a greater buffer for the peso exchange rate vs. the US dollar,” Mr. Ricafort said. — Beatrice M. Laforga