The Philippines posted a balance of payments surplus of $928 million in May, a reversal of the $583-million deficit recorded in the same month last year, the Bangko Sentral ng Pilipinas said Wednesday.
“Inflows in May 2019 stemmed mainly from the national government’s net foreign currency deposits, and the BSP’s foreign exchange operations and income from its investments abroad,” the central bank said in a statement.
The inflows, however, were offset partially by the payments made by the government on foreign exchange obligations during the month in review.
The BoP position in the first five months of the year registered a surplus of $5.19 billion, a turnaround from the $2.08-billion deficit recorded year-on-year.
“The surplus may be attributed partly to remittance inflows from overseas Filipinos during the first four months of the year, and net inflows of foreign portfolio, foreign direct and other investments in the first quarter of 2019,” the Bangko Sentral said.
The BoP position reflects the final gross international reserves level of $85.36 billion as of end-May 2019.
The GIR at this level represents a more than ample liquidity buffer and is equivalent to 7.4 months’ worth of imports of goods and payments of services and primary income. It is also equivalent to 5.1 times the country’s short-term external debt based on original maturity and 3.6 times based on residual maturity.
The Bangko Sentral last week revised upward the balance of payments projections this year to a surplus of $3.7 billion from a deficit of $3.5 billion in November 2018, taking into account the expected sustained strength of the domestic economy amid the downward revision in the global economic growth outlook.
BSP Deputy Governor Diwa Guinigundo said during the first-quarter BoP briefing that other key considerations in the revised projections were the near-term moderation in the global trade outlook, expected a decline in commodity prices, possible ratcheting up of trade tensions between the US and China, and US Fed’s shift to “dovish” monetary policy stance.
Other factors were the uncertainties over Brexit developments, expected a modest rebound in non-resident capital flows to emerging markets and the bright outlook of the domestic economy.