THE Philippine economy continued to earn dollars in February due mainly to gains from the foreign-exchange operations of the Bangko Sentral ng Pilipinas (BSP), the government reported on Tuesday.
The country’s balance of payments (BOP) yielded a net surplus of $467 million in February, a reversal of the $429-million BOP deficit recorded in the same month last year. This February record, however, is lower than the $2.704- billion BOP surplus recorded in January.
The BOP is the summary of the country’s dollar transactions with the rest of the world; a surplus in this economic indicator means the country earned more dollars than what it spent during the time period, while a deficit means the economy lost more dollars than what it earned.
This is the second consecutive month that the country’s BOP has recorded a surplus, both being attributed to the gains in the BSP’s foreign exchange operations.
“Inflows in February 2019 stemmed mainly from the BSP’s foreign exchange operations, national government’s [NG] net foreign-currency deposits, and BSP’s income from its investments abroad,” the BSP said in a statement.
“These were partially offset, however, by the payments made by the NG for its foreign exchange obligations during the month in review,” it added.
The BSP has a mandate of smoothening out volatilities in the foreign exchange market should movements be excessive or out of hand.
For the first two months of 2019, the cumulative BOP of the country hit a surplus of $3.17 billion. This is a turnaround from the $961-million BOP deficit recorded in the first two months of 2018.
The BSP said the surplus may be partly attributed to remittance inflows from overseas Filipinos in January and net inflows of foreign portfolio investments (FPI) for the first two months of the year, which was a reversal of the net outflows reported last year.
Cash remittances from Filipino migrant workers summed up to $2.48 billion in January 2019, or 4.4 percent higher than last year’s $2.38 billion.
The BSP said this growth was in line with the increase in remittances from both land-based and sea-based workers.
By country source, the United States registered the highest share of overall remittances at 35.5 percent. It was followed by Saudi Arabia, Singapore, United Kingdom, United Arab Emirates, Japan, Canada, Qatar, Hong Kong and Kuwait. The combined remittances from these countries accounted for almost 78 percent of total cash remittances.
Meanwhile, for the first two months of the year, net FPI inflows amounted to $1.151 billion, up from last year’s $811.78 million.
FPI are known as “hot” or “speculative” money because they are easily pulled in and out of the local platforms in the slight change of global and local sentiment.
Image credits: Nonie Reyes