By Lee C. Chipongian
The Bangko Sentral ng Pilipinas (BSP) reported a lower balance of payments (BOP) surplus of $4.788 billion in the first six months after incurring a shortfall for the month of June.
The June BOP was in deficit of $404 million, the first monthly deficit for 2019. The BOP was also in deficit the same time in 2018 but higher at $1.177 billion.
In a statement, the BSP said the January-June surplus reversed same time last year’s six-month deficit of $3.257 billion. “The surplus may be attributed partly to remittance inflows from overseas Filipinos during the first five months of the year and net inflows of foreign direct investments during the first four months of the year,” said the BSP.
For June only, the BSP noted what it called a “substantial outflow” from the principal and interest payments of the National Government (NG) on its foreign exchange obligations. “This outflow was partially tempered, however, by the NG’s net foreign currency deposits, and the BSP’s foreign exchange operations as well as income from its investments abroad during the month in review,” it added.
The central bank on Friday also released the final gross international reserves (GIR) level ofv$85.77 billion as of end-June.
It said that the GIR “represents a more than ample liquidity buffer”. It is equivalent to 7.5 months’ worth of imports of goods and payments of services and primary income, and about 5.1 times the country’s short-term external debt based on original maturity and 3.7 times based on residual maturity.
Last June, the BSP announced a revised BOP projection for 2019 of $3.7 billion, reversing a November 2018 estimate of a $3.5 billion deficit. The latest BOP surplus projection is equivalent to one percent of GDP.
The BSP changed its BOP projection to a surplus in light of “better prospects in the second half” of 2019 in terms of fund flows. The key factors for the revised BOP projections were the downward revision in global growth outlook, the near-term moderation in global trade outlook and the expected decline in commodities.