The Philippines’ balance of payment position (BoP) hit $1.044 billion in August, the highest in four months, due to increased special drawing rights (SDR) from the International Monetary Fund (IMF).
This was 58% higher than a year earlier and 62% more month on month, the central bank said in a statement on Friday.
“The BoP surplus in August was due mainly to the additional allocation of SDRs to the Philippines given the IMF’s efforts to increase global liquidity amid the pandemic and the BSP’s income from its investments abroad,” it said.
This was partially offset by foreign currency withdrawals by the National Government from the central bank as it paid off some debt, as well as the net foreign exchange operations of the Bangko Sentral ng Pilipinas (BSP).
The IMF allocated about $650 billion in special drawing rights last month to its members as part of efforts to help countries recover from a coronavirus pandemic. The Philippines got a $2.777-billion share.
The payment surplus was also boosted by remittance inflows and a rebound in foreign direct investment, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message.
Cash remittances rose by 2.5% to a seven-month high of $2.853 billion in July, bringing the year to date level to $17.771 billion.
Foreign direct investment inflows in June climbed by 60.4% to $833 million from a year earlier, pushing first-half inflows higher by 40.7% to $4.298 billion.
The BoP shows the country’s transactions with the rest of the world. A deficit means more funds left the country, while a surplus means more money came in.
The payment position remained in a deficit for the eighth straight month at $253 million, a reversal from the $4.774-billion surplus a year earlier.
The central bank last week lowered its BoP target this year to $4.1 billion, which is equivalent to 1.1% of economic output, from a previous estimate of a $7.1-billion surplus. — Luz Wendy T. Noble