The Bangko Sentral ng Pilipinas reported a significant reversal in the balance of payments (BOP) position in September that stood as a surplus of USD3.5 billion. This marks a substantial improvement from the USD414 million deficit recorded in the same month last year, according to the BSP.
The surge in BOP surplus in September is attributed to inflows from the national government’s net foreign currency deposits with the BSP, along with net income generated from the BSP’s investments abroad. The uptick in BOP activity brought the year-to-date surplus to USD5.1 billion, a notable increase from the USD1.7 billion surplus recorded during the January to September period of 2023.
Preliminary data indicates that the cumulative surplus reflects a narrowing trade deficit, bolstered by continued net inflows from personal remittances, trade in services, and net foreign borrowings by the national government. Additionally, contributions from net foreign direct and portfolio investments have played a crucial role in strengthening the BOP position.
The positive BOP outcome also led to an increase in the country’s gross international reserves (GIR), which rose to USD112.7 billion by the end of September 2024, up from USD107.9 billion at the end of August. The foreign currency reserve level is considered an ample external liquidity buffer, equivalent to 8.1 months’ worth of imports of goods and payments for services and primary income. Furthermore, it stands at approximately 4.5 times the country’s short-term external debt based on residual maturity.
The positive trend in the BOP highlights the country’s resilience amid global economic challenges and underscores the importance of sustained remittances and foreign investments in supporting the nation’s economic stability.
