April BOP grows 57%, signals big rebound

In file photo: A store in Santa Cruz, Manila which has been making flags for more than 50 years unfurls a flag outside their store, which they created in time for 122th celebration of the Philippine Independence Day.

THE country’s bond issuances pushed its Balance of Payments (BoP) past the $2-billion surplus mark in April alone and reversed the deficit seen in the previous month.

The Bangko Sentral ng Pilipinas (BSP) reported on Wednesday that the country’s BoP surplus hit $2.61 billion in April, a 57-percent growth from the $1.67 billion surplus in April 2020.

This is also the first month that the country’s BoP entered surplus territory for this year.

The BoP is usually considered an important economic indicator in an economy as it shows the level of earnings or expenses of the Philippines with its transactions with the world. A surplus means that the country had more dollar earnings than its expenses during the period.

The Philippines’s BoP was in deficit in the first three months of 2021, the largest of which is the $2.02-billion deficit the country incurred in February.

“The BOP surplus in April 2021 was attributed to inflows arising mainly from the proceeds of the national government ROP Global and Samurai bond issuances, which were deposited to the BSP,” the Central Bank said in a statement.

In-end March this year, the Philippine government was able to raise P24.2 billion in its sale of 3-year zero-coupon Samurai bonds, marking its successful return to the said market after more than a year of hiatus. Following this, in mid-April, the government also raised P122.4 billion from its first triple-tranche euro-denominated bond offering.

The strong BoP surplus of the country in April almost closed the gap for the first four months of the year.

The Philippines posted a deficit of $231 million in January to April this year, recovering from the $2.84-billion deficit in January to March this year. However, the deficit is still a reversal of the $1.6-billion surplus in January to April in 2020.

The BSP blamed the four-month deficit on the country’s merchandise trade deficit and net outflows of foreign portfolio investments.

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