PH records $2-B balance of payments surplus in May

MANILA – The country's balance of payments (BOP) posted a surplus in May this year, a reversal from the deficit recorded in the same month last year.

Data released by the Bangko Sentral ng Pilipinas (BSP) Wednesday showed that the BOP position last month recorded a surplus of USD2 billion, a turnaround from the USD439 million deficit seen in May 2023.

The BSP said the surplus during the month reflected inflows from the National Government’s (NG) net foreign currency deposits with the BSP, which include proceeds from its issuance of Republic of the Philippines' Global Bonds, and net income from the BSP’s investments abroad.

The BOP is a summary of the economic transactions of a country with the rest of the world for a specific period.

The overall position can be in surplus, deficit or balance.

For the first five months of the year, the BOP recorded a surplus of USD1.6 billion, down from the USD2.9 billion surplus recorded in January-May 2023.

"Based on preliminary data, this cumulative BOP surplus reflected mainly the narrowing trade in goods deficit alongside the continued net inflows from personal remittances, net foreign borrowings by the NG, foreign direct investments, foreign portfolio investments, and trade in services," the BSP said.

Recent data from the Philippine Statistics Authority showed that the trade deficit for January to April this year narrowed to USD16.3 billion from USD19.3 billion in the same period last year.

The BSP said the latest BOP position reflects an increase in the final gross international reserves (GIR) level to USD105 billion as of end-May 2024 from USD102.6 billion as of end-April 2024.

"The latest GIR level represents a more than adequate external liquidity buffer equivalent to 7.7 months’ worth of imports of goods and payments of services and primary income," the BSP said. (PNA)