By Luz Wendy T. Noble, Journalist
The Philippines’ balance of payments (BoP) position moved into a surplus in March, driven by domestic government foreign currency deposits and central bank investments abroad.
Data released by the Bangko Sentral ng Pilipinas (BSP) on Tuesday showed that the BoP recorded a surplus of $754 million last month. This is a reversal from the $73 million gap a year earlier, as well as the $157 millionIfcited in February.
It is also the BoP’s biggest surplus since December’s $991 million surplus.
“The BoP surplus in March 2022 reflected inflows mainly from net national government (NG) foreign currency deposits with BSP and income of BSP from its overseas investments,” the bank said. center in a press release.
Last month’s BoP surplus could be partly attributed to global government bond issuance, the chief economist at Rizal Commercial Banking Corp said. Michael L. Ricafort in a Viber message.
The Office of the Treasury raised $2.25 billion through its first three-tranche dollar-denominated bond issue in March.
The government will use the proceeds for the national budget and the sustainable financing program.
At its level at the end of March, the BoP reflect a Iffinal gross international reserve of $107.31 billion, down 0.5% from $107.8 billion the previous month.
This is enough to cover 7.1 times the country’s short-term external debt on the basis of the original maturity and 5.3 times on the basis of the residual maturity. It also represents buffers equivalent to 9.5 months of imports of goods and payments for services and primary income.
The BoP position posted a surplus of $495 million at Iffirst quarter of 2022, a reversal from the $2.844 billion deficit in the same period last year.
The BoP provides an overview of the country’s transactions with the rest of the world. A deficit means that more funds have left the country, while a surplus shows that more money has entered.
The ongoing war between Russia and Ukraine could complicate global and domestic recovery and affect the country’s BoP this year, Security Bank Corp. chief economist Robert Dan J. Roces said.
“War-induced volatility in global financial and commodity markets has the potential to ripple through the local economy, indicating a negative impact on our major trading partners and leading to a [BoP] deficit for 2022,” Roces said in a Viber message.
The Philippines is a net oil exporter, making it vulnerable to war-induced fuel price spikes.
For this year, the BSP expects the BoP position to show a decline of $4.3 billion.Fhere, which is equivalent to 1% of gross domestic product.