Philippines Q1 BOP position reverses to surplus

Source: Xinhua| 2019-06-14 22:04:45|Editor: Li Xia
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MANILA, June 14 (Xinhua) -- The Philippines' balance of payments position (BOP) recorded a surplus of 3.8 billion U.S. dollars in the first quarter of 2019, a reversal of the 1.2 billion U.S. dollars deficit recorded in the same quarter last year, the Bangko Sentral ng Pilipinas (BSP) said on Friday.

The BSP said this developed as a result of the higher net inflows, or the net borrowing by residents from the rest of the world, in the financial account, mainly on account of the reversal of portfolio investments to net inflows as well as the increased net inflows in the other investment and direct investment accounts during the quarter.

"The strong performance of the financial account during the quarter was bolstered by favorable investor sentiment attributed to the country's solid macroeconomic fundamentals and firm economic growth prospects," the BSP said.

Meanwhile, the BSP said the current account registered a higher deficit due to the widening deficit in the trade-in-goods account, arising mainly from the continued expansion in imports of goods in support of the sustained growth of domestic economic activity.

As a result of these developments, the BSP said the Philippines' gross international reserves amounted to 83.6 billion U.S. dollars as of end-March 2019, higher than the 80.5 billion U.S. dollars level registered in end-March 2018.

"At this level, reserves can sufficiently cover 7.3 months' worth of imports of goods, and payments of services and primary income," the BSP said, adding "it was also equivalent to 5 times the country's short-term external debt based on original maturity and 3.3 times based on residual maturity."

The year-on-year increase in reserves was on account largely of the national government's net foreign currency deposits, the BSP's income from its investment abroad and revaluation adjustments on its foreign currency-denominated reserves. "This was partially offset by the government's payments for its foreign exchange obligations."

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