MANILA, Philippines – The Philippines kept nearly twice as much in the first 11 months of the year as the coronavirus pandemic pushed the government and the private sector to borrow more abroad as the contraction economy led to a sharp drop in imports.
This said the Bangko Sentral ng Pilipinas which reported on Monday that the country’s overall balance of payments position showed a cumulative surplus of $ 11.79 billion from January to November.
This was 87% higher than the surplus of $ 6.27 billion recorded for the same period a year ago.
The balance of payments position represents the net flow of foreign currency into or out of the economy during a given period, recording the economy’s income from exports of goods and services and from inflows of investments, offset by the expenditure of imports and the outflows of investments.
“Based on preliminary data, the current account surplus was mainly supported by an increase in the national government’s net external borrowing and a decrease in the merchandise trade deficit, as well as by sustained net inflows from shipments. in personal funds, foreign direct investment and trade in services, ”the bank said in a statement.
As of November 2020 alone, the Philippine economy posted a surplus dollar flow of $ 1.47 billion.
Last month’s balance of payments surplus reflected inflows mainly from BSP’s foreign exchange operations and income from its investments abroad. “These inflows were partly offset, however, by the currency withdrawals the national government made to pay off its foreign currency obligations,” the central bank said.
The latest balance of payments position reflects an increase in the final level of gross international reserves to $ 104.82 billion at end-November 2020, from $ 103.8 billion at end-October 2020.
The central bank explained that the last level of dollar reserve represents an “adequate” external liquidity cushion, which can help cushion the domestic economy against external shocks.
Specifically, it ensures the availability of foreign exchange to meet balance of payments financing needs, such as payment for imports and debt servicing, under extreme conditions when there is no revenue from them. export or foreign loans.
This is equivalent to 11.2 months of imports of goods and payments for services and primary income. It is also about 9.2 times the country’s short-term external debt on the basis of original maturity and 5.3 times on the basis of residual maturity.
Short-term debt based on residual maturity refers to the stock of external debt with an original maturity of one year or less, plus principal repayments on medium and long-term public sector loans. and private maturing within the next 12 months.
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