THE Bangko Sentral ng Pilipinas (BSP) reported that the country’s Balance of Payments (BOP) posted a surplus for the second consecutive month this year.
The country’s BOP hit a surplus of $1.044 billion in August this year, bringing the eight-month BOP position of the Philippines to a slimmer deficit of $253 million.
August’s BOP surplus is the largest since April this year. It is also higher than the $657-million BOP surplus seen in the same month in 2020.
The country’s eight-month BOP position, however, is still lagging behind the $4.77-billion surplus in the same eight-month period last year.
The BOP is usually considered as 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 dollar expenditures during the period.
The BSP attributed the August BOP surplus to the additional allocation of Special Drawing Rights (SDR) to the Philippines given the IMF’s efforts to increase global liquidity amid the pandemic and the BSP’s income from its investments abroad.
The surplus could have been larger, the BSP said, if not partly offset by the national government’s (NG) foreign currency withdrawals from its deposits with the BSP as the NG settled its foreign currency debt obligations and paid for various expenditures, and the BSP’s net foreign exchange operations.
Just last week, the BSP announced that it had lowered its projection for the country’s BOP for this year and for 2022, taking into consideration current deficits in the country’s external position as well as recent economic developments in the local and international front.
The 2021 BOP projection was from a surplus of $7.1 billion down to $4.1 billion for this year on a “more guarded view” of economic recovery. The 2022 BOP projection has also been lowered from $2.7 billion down to a $1.7-billion surplus.
This means that the country should incur an average of about $1.09-billion surplus on average in the last four months of the year to hit the BSP’s new projection.
“By and large, in this assessment of the BOP outlook, while some upside risks remain, downside risks continue to build up underpinned by the emergence of highly transmissible variants of the Covid-19 virus,” the BSP earlier said.
“The lingering uncertainty continues to cast a shadow on external sector prospects over the near term as the direction and duration of the pandemic remains little known,” it added.