THE local economy posted dollar earnings in end-November this year, reversing the deficit seen in the same 11-month period in 2018.
On Thursday, the Bangko Sentral ng Pilipinas (BSP) reported a balance of payments (BoP) surplus of $6.27 billion in January to November 2019.
This is a turnaround from the $4.75-billion BOP deficit recorded in the first 11 months of 2018.
The BoP is an economic indicator that records the total transactions of the Philippines with the rest of the world.
According to the Central Bank, the 11-month surplus may be attributed partly to lower trade in goods account deficit, higher net receipts in the trade in services account and personal remittance inflows from overseas Filipinos.
The BSP said net inflows of foreign direct investments and foreign portfolio investments also helped push the surplus during the period.
The surplus for the month, however, declined in November compared to its volume in November last year.
The BoP surplus for November alone hit $541 million, lower than the $847-million BOP surplus recorded in the same month last year.
“Inflows in November 2019 reflected the BSP’s foreign-exchange operations, increase in the national government’s [NG] net foreign-currency deposits and BSP’s income from its investments abroad,” the BSP said in a statement.
“These inflows were offset, however, by outflows representing payments made by the NG on its foreign-exchange obligations during the month in review,” it added.
The decline in the country’s BoP surplus towards the end of the year was not unexpected.
Earlier, ING Bank Manila Economist Nicholas Mapa warned of renewed pressure on the country’s BoP for the latter part of 2019.
“As we round out the year into 2020, we do, however, expect a slight change in the tides with the Fed expected to be neutral next year and with the government gearing up for a double-headed fiscal stimulus,” he said.
“These developments could lead to a renewed widening of the trade deficit [as imports bloat] to exert pressure on the BoP, while financial flows may enjoy the same velocity in 2020, with BSP expected to cut policy rates to support the growth objective,” he added.
Image credits: Ed Davad