Connect with us

Hi, what are you looking for?

Economy

October BoP surplus biggest in nearly a decade

THE COUNTRY’S balance of payments (BoP) surplus reached its highest in nearly a decade in October, supported by the Bangko Sentral ng Pilipinas’ (BSP) income from foreign investments and foreign exchange operations.

The BSP reported on Thursday that the country posted a BoP surplus of $3.44 billion last month, surging from the $163 million logged a year ago and also 63% bigger than the $2.104-billion surfeit seen in September.

This is the biggest monthly surplus since the $3.95 billion recorded in November 2010.

The BoP portrays the country’s economic transactions with the rest of the world within a given period.

Year to date, the country’s BoP position was at a surplus of $10.31 billion, 80% higher than the $5.73-billion surfeit in the first 10 months of 2019.

The BSP expects a BoP surplus of $8.1 billion by year-end which is equivalent to 0.6% of gross domestic product.

Contributing to the October surplus were the BSP’s income from investments abroad, inflows from its foreign exchange operations and foreign currency deposits of the national government held with the central bank, it said in a statement.

These were slightly offset by payments made by the government for foreign debt obligations.

Improvements in foreign direct investments (FDI), foreign portfolio investments, and cash remittances also supported the October surplus, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said on Thursday.

“We have also received quite a number of foreign aid to help us recover from the pandemic and the successive natural calamities that happened,” Asian Institute of Management economist John Paolo R. Rivera said in an email.

Hot money posted a net inflow of $439.46 million in October, surging by 320% from the $104.53 million last year and a reversal of the net outflows worth $493.65 million in September. Meanwhile, net FDI inflows climbed 46.9% to  $637 million in August.

Cash remittances also rose 9.3% to $2.601 billion in September from the $2.379 billion seen a year ago.

The BoP position in October also reflects a final gross international reserves (GIR) level of $103.8 billion, increasing by 3.35% from the $100.44 billion seen as of end-September and by 20% from the $85.834 billion recorded a year ago.

“The latest GIR represents a more than adequate external liquidity buffer. This is equivalent to 10.3 months worth of import of goods and payments of services and primary income,” the central bank said.

A BoP surplus may not necessarily be ideal in the long run as we become dependent on export-driven growth, Mr. Rivera said.

“A surplus is good if it’s driven by an increase in exports because it will lead to a stronger economy as consumption spending will increase. But it is not good if the surplus was due to decline in imports, which is indicative of a weak economic growth,” he said.

Latest data from the Philippine Statistics Authority showed September exports grew 2.2% to $6.22 billion, the first month of expansion since February. Meanwhile, imports declined by 16.5% to $7.92 billion. This brought the September trade deficit at $1.71 billion, smaller than the $3.41-billion gap in the same month of 2019. — L.W.T. Noble

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

Economy

Federal Land, Inc. celebrates five decades of solid commitment to property development By Adrian Paul B. Conoza Philippine business visionary Dr. George S.K. Ty’s...

Economy

APPROVED foreign investment pledges more than doubled in the second quarter from a year ago, as the Philippine economy continued to reopen amid looser...

Economy

By Abigail Marie P. Yraola, Researcher APPROVED foreign investment pledges more than doubled in the second quarter from a year ago, as the Philippine...

Economy

PRESIDENT Ferdinand R. Marcos, Jr. is looking into the possibility of allowing food manufacturers to directly import sugar amid tight domestic supply and high...

Economy

By Alyssa Nicole O. Tan, Reporter A SENATOR raised the possibility of legalizing the commercial importation of secondhand garments amid the proliferation of stores...

Economy

DESPITE the president’s protectionist pronouncements, the Marcos administration will likely continue to pursue economic liberalization, analysts said. This, despite concerns over local firms’ competitiveness...

You May Also Like

Investing

Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...

Economy

Ivermectin, an existing drug against parasites including head lice, has had a checkered history when it comes to treating COVID-19. The bulk of studies...

Investing

Insomnia is the most common sleep disorder in the global population. Therefore, it is a problem that many people suffer or have suffered throughout...

Investing

Instagram still holds the top spot for social media in terms of building brand reputation and expanding business potential. Every day, more and more...

Disclaimer: SmartRetirementReport.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.