A sustained rise is projected in the country’s balance of payment (BOP) surplus which rose to $6.88 billion in end-September benefiting the peso and the foreign reserves.
The BOP surplus last September amounted to $2.1 billion, higher than month-ago’s $657 million surplus and year-ago’s $38-million surplus, according to the Bangko Sentral ng Pilipinas.
The surplus in the first nine months this year is also higher than year-ago’s $5.57 billion.
The BOP refers to a country’s total transactions with the rest of the world in a given period. A surplus results if a country exports more than it imports, among others.
Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort traced the rise of the BOP surplus to narrower trade deficit due to slowdown in imports because of the pandemic, proceeds of foreign borrowings by both the government and the private sector, increase in foreign investments in the country and sustained inflows of remittances, revenues of the business process outsourcing (BPO) sector, and other income from abroad.
Ricafort said the increase in stock market and bond prices in the US and other countries also boosted the Philippines’ BOP position since it increased income from foreign investments of both the Philippine government and other local residents.
These factors are expected to continue supporting the country’s BOP position in the coming months and in turn boost both the country’s foreign reserves or the gross international reserves (GIR) and the peso.