(Updates with details of the BOP report, analyst comment)
The Philippines’ balance of payments (BOP) surplus in February recovered from a slowdown the previous month and grew 624 percent to hit its highest level in nearly two years, boosted by savings on the country’s lower oil import bill and capital inflows from the eurozone.
The BOP in February registered a $985 million surplus, up by more than $800 million from the $136 million BOP surplus in January, data released by the Bangko Sentral ng Pilipinas (BSP) late Thursday showed.
It was also significantly higher than the $345 million surplus seen in February last year.
The February 2015 surplus was the highest recorded since the $1.099 billion surplus posted in July 2013.
In the first two months of 2015, the payments balance surplus reached $1.121 billion, slightly higher than the $1.084 billion surplus in the corresponding two-month period in 2014.
In its breakdown of the component accounts, the BSP data showed that the BOP rebound in the first two months of 2015 from the deficit in full-year 2014 was driven by strong remittances and big gains in the country’s primary and secondary income accounts.
The BOP for full-year 2014 ended with a $2.88 billion deficit, reversing the 2013 surplus of $5.09 billion.
ECB QE impact
An analyst traced the high BOP surplus to the surge in capital flows into the Philippines brought about by the monetary policy easing in the eurozone.
The ECB in January unveiled a program to buy 60 billion euros ($68 billion) of private and public bonds each month starting in March, a move intended to ward off deflation in the eurozone.
“Aside from saving on our oil import bill due to lower global oil prices, capital inflows arising from ECB’s [European Central Bank] decision to carry out QE [quantitative easing]has been a key driver to our positive BoP position,” said Emilio Neri Jr., lead economist at the Bank of the Philippine Islands.
Foreign portfolio investments or “hot money” inflows in February climbed to a two-year high of $1.19 billion, reversing the $354.86 million net outflow recorded a year earlier.
The BOP summarizes the country’s economic transactions with the rest of the world over a certain period. It consists of the current account, capital account and financial account.
For full-year 2015, the country’s payments balance is projected by the BSP to show a surplus of $1 billion.