The Philippines’ balance of payments posted a surplus of $1.47 billion in November, up from a $541-million excess in the same month last year, on sustained inflows from the Bangko Sentral ng Pilipinas’ foreign exchange operations and income from investments abroad.
The BSP said in a statement Monday the November figure brought the BOP surplus in the first 11 months to $11.79 billion, up from the $6.3-billion surplus registered a year ago.
It said the inflows were partly offset by the foreign currency withdrawals the national government made to pay foreign currency debt obligations.
“Based on preliminary data, the current BOP surplus was supported mainly by higher net foreign borrowings by the government and lower merchandise trade deficit along with sustained net inflows from personal remittances, foreign direct investments and trade in services,” the BSP said.
The BOP position reflects an increase in the final gross international reserves level to $104.82 billion as of end-November 2020. The GIR represents an adequate external liquidity buffer, which can help cushion the domestic economy against external shocks. This is equivalent to 11.2 months’ worth of imports of goods and payments of services and primary income.
It is also about 9.2 times the country’s short-term external debt based on original maturity and 5.3 times based on residual maturity.
The BSP earlier revised the 2020 BOP surplus projection to $12.8 billion from the previous estimate of $8.1-billion surplus, taking into consideration the gradual recovery in global trade. The updated BOP surplus target is equivalent to around 3.4 percent of gross domestic product for the year.
BSP Deputy Governor Francisco Dakila said in an online briefing on the Third-Quarter 2020 Balance of Payments Developments Report that the upward revision was supported by the “higher foreign borrowings of the government [amid the pandemic] and lower merchandise trade deficit.”
Current account, one of the main components of the balance of payments, is also seen to post a surplus of $8.4 billion in 2020, higher than the previous projection of $6 billion. Current account is the balance of exports and imports of goods, services and income balances.
Dakila also the gross international reserves were expected to end the year at $105 billion, or equivalent to 11.6 months’ worth of import cover. The GIR estimate was higher than the projection of $100 billion made in September.
The BSP said that in 2021, the major BOP accounts were expected to show continued improvement but could remain below pre-pandemic levels. The overall BOP position is seen at $3.3-billion surplus in 2021, attributed mainly to the expected moderation of the current account surplus next year.
Meanwhile, the BSP said registered foreign portfolio investments yielded net inflows amounting to $227 million in November, resulting from the $1.6 billion gross inflows and $1.3 billion gross outflows.
About 68.1 percent of investments registered were in listed securities (pertaining mainly to banks, property companies, holding firms, food, beverage and tobacco companies and retail firms) while the remaining 31.9 percent went to investments in Peso government securities.
The United Kingdom, Singapore, the United States, Hong Kong and Norway were the top five investor countries in November.
Data showed that from January to November 2020, portfolio investments yielded net outflows of $3.7 billion resulting from the $14.3-billion gross outflows and $10.6-billion gross inflows. This was larger compared to the $1.6-billion net outflows noted in the same period last year.