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The country’s overall dollar surplus fell to a 5-month low in July, the Bangko Sentral ng Pilipinas (BSP) reported on Friday.
The Balance of Payments (BOP) – or the summary of the Philippines’ transactions with the rest of the world – registered a surplus of $ 8 million in July, the lowest of the year since it showed a deficit in January.
The balance of payments is generally considered as an important economic indicator in an economy, as it shows the level of profit or expenditure of the Philippines with its transactions with the world. A surplus means that the country made more profit in dollars than its expenditures during the period.
BSP data showed that the balance of payments surplus in July is a decrease from the surplus of $ 80 million in the previous month and the $ 248 million in the same month last year.
“The balance of payments surplus in July 2020 mainly reflected the national government’s inflows [NG] the resources of foreign loans that were deposited in the BSP, as well as the income of the BSP from its investments abroad, “said the Central Bank in a statement.
“However, these inflows were offset by the withdrawals of foreign currency made by the GN to pay its debt obligations in foreign currency during the month under review,” he added.
During the first seven months of the year, the country’s balance of payments surplus reached $ 4.12 billion, less than the $ 5.04 billion in the same seven-month period in 2019.
“The current surplus of the balance of payments [for the first seven months of the year] it was mainly supported by external loans from the GN, most of which were withdrawn from April to July, and the lower merchandise trade deficit, ”said the BSP.
“These positive results completely canceled out the impact of higher net outflows of foreign portfolio investment and lower net inflows of foreign direct investment, trade in services and personal remittances,” he added.
