The country’s overall balance of payments (BOP) position posted a surplus of US$657 million in August 2020, bringing the year-to-date surplus position to US$4.77 billion. The BOP surplus in August 2020 reflected mainly the inflows from the BSP’s foreign exchange operations and income from its investments abroad.


The cumulative BOP surplus of US$4.77 billion was lower than the US$5.53 billion surplus recorded for the same period a year ago. The current BOP surplus was supported mainly by foreign borrowings by the National Government along with lower net deficit in merchandise trade.1 These outcomes offset fully the impact of higher net outflows of foreign portfolio investments, and lower net inflows from foreign direct investments, trade in services, and personal remittances.2


The BOP position reflects a record high final gross international reserves (GIR) level of US$98.95 billion as of end-August 2020 from US$98.6 billion as of end-July 2020. At US$98.95 billion, the GIR represents a more than adequate external liquidity buffer, which can cushion the domestic economy against external shocks.3   This is equivalent to 9.8 months’ worth of imports of goods and payments of services and primary income. Moreover, it is also about 9 times the country’s short-term external debt based on original maturity and 5.4 times based on residual maturity.4



1  Based on the International Merchandise Trade Statistics published by the Philippine Statistics Authority (PSA) for January-July 2020.

2  Based on data on net BSP-registered portfolio investments reported by custodian banks for January-July 2020, personal remittances from overseas Filipinos for January-July 2020, and foreign direct investments and trade in services for January-June 2020.

3  Specifically, it ensures availability of foreign exchange to meet balance of payments financing needs, such as for payment of imports and debt service, in extreme conditions when there are no export earnings or foreign loans.

4  Short-term debt based on residual maturity refers to outstanding external debt with original maturity of one year or less, plus principal payments on medium- and long-term loans of the public and private sectors falling due within the next 12 months.



Source: Bangko Sentral ng Pilipinas (BSP)

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