Hits $917M, highest in more than 2 years
THE Philippines’ balance of payments (BoP) reverted to a surplus in April after a series of monthly deficits, hitting $917 million and marking the highest surplus in more than two years, central bank data showed on Friday.
The BoP level in April wiped out a $550 million deficit in March and exceeded the surplus of $184 million recorded in April 2016. It was also the largest surplus since February 2015, when the payments position stood at a surplus of $985 million.
However, for the four months to April, the BoP still showed a deficit of $78 million, more than triple the size of the first four months’ deficit of $25 million in 2016.
Stronger exports, BPO, remittances
Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa Guinigundo traced the BoP surplus in April to increases in exports, remittances and business process revenues.
“It is very encouraging that the April BoP position reverted to a surplus position and mitigated the cumulative BoP shortfall for the first four months of 2017,” he said.
Details on the actual and specific BoP components have yet to be released, but Guinigundo said the central bank expects support to be coming from the recovery in merchandise exports, sustained overseas Filipino workers remittances, business process outsourcing (BPO) revenues and additional inflows from tourism and foreign investments.
“As a result, BSP foreign exchange operations netted in large foreign exchange inflows, including investment income. National government deposits of its foreign exchange borrowings also contributed to the favorable outturn even as national government debt servicing moderated the inflows,” Guinigundo said.
Rebound from 6-mths of deficit
Rajiv Biswas, Asia-Pacific chief economist at IHS Markit, saw the significance of the rebound in April after a long series of monthly deficits.
“The sharp turnaround in the balance of payments in April with a large $917 million surplus is a very positive development after six successive months of deficits,” he said.
Biswas pointed out the reversal in foreign portfolio capital flows as an important contributory factor, with a swing from a net portfolio capital outflow of $459 million in March to a net portfolio capital inflow of $51 million in April.
The return to a net inflow mainly reflected improving foreign investor sentiment about the Philippine economy, he said, with portfolio capital outflows in April at $1.26 billion, about 30.8 percent lower than the outflows in March at $1.83 billion.