The Philippines in July this year continued to report far more foreign currency-denominated expenses than earnings although the shortfall, the Bangko Sentral ng Pilipinas (BSP) said, has sharply diminished on both annual and monthly basis.
The disparity in the balance of payments (BOP) in July stood at only $53 million, sharply down from a $606 million deficit the previous June and year-ago deficit totaling $1.82 billion.
As a result, the BOP in the first seven months this year stood as a surplus reaching $2.21 billion, a complete turnaround from year-ago deficit totaling $4.92 billion.
The BSP traced this development to sustained inflows derived from the foreign currency earnings of overseas Filipinos, proceeds from the foreign currency borrowings of the national government, export earnings and foreign direct investments.
The net impact of these inflows on the aggregate helped lift the country’s gross international reserves (GIR) to $100 billion, meaning the Philippines has enough foreign currency buffer to finance 7.4 months worth of imports of goods and payments of services and primary income.
This much GIR ensures the economy has more than enough foreign currency to pay for imports and service maturing foreign loans, the BSP explained.
The BSP said that at this level of reserves, such are 5.9 times the resources required to finance short-term foreign debt based on original maturity and 4.1 times based on residual maturity.
