Data from the Bangko Sentral ng Pilipinas also showed a reversal in July 2024 from the previous month’s net dollar outflows of $155 million. This shift was driven by inflows from the BSP’s investments abroad and net foreign currency deposits from the national government.
Despite the July surplus, the year-to-date balance of payments surplus declined to $1.5 billion, compared to $2.2 billion during the same period in 2023.
This decrease reflects a narrowing trade deficit, combined with continued net inflows from personal remittances, foreign direct investments, and trade in services, the central bank said.
'Balance of payments?'
The balance of payments is the net tally of all the transactions for goods and services that a nation’s economy has with the rest of the world. A surplus means the country is earning more dollars than it is spending, while a deficit represents the opposite.
The balance of payments surplus in July also contributed to an increase in the country’s gross international reserves, which rose to $106.7 billion by the end of July, up from $105.2 billion in June.
The central bank said these dollar reserves provide a sufficient external liquidity buffer, covering 7.9 months of imports and 6.1 times the country’s short-term external debt based on original maturity.
This return to a dollar flow surplus underscores the Philippines' improved external position, despite ongoing global economic uncertainties, and highlights the resilience of its financial systems in managing foreign exchange flows.
