PH economy sees $2-B dollar flow surplus in May on govt’s foreign borrowings

More dollars entered the Philippine economy than left it last month thanks mainly to the inflow of foreign borrowings of the national government, according to the Bangko Sentral ng Pilipinas (BSP).

In a statement, the BSP said it recorded a $2-billion surplus in its balance of payments (BOP) for May 2024, marking a turnaround from the $439 million deficit in May 2023.

This surplus is primarily attributed to the national government's net foreign currency deposits with the central bank, which include proceeds from the issuance of ROP Global Bonds and the BSP’s investment income abroad.

This positive BOP position elevated the year-to-date surplus to $1.6 billion, albeit lower than the $2.9 billion surplus during the same period in 2023.

The cumulative surplus reflects a reduced trade deficit, sustained personal remittances, and continued net foreign borrowings and investments, the BSP said.

Consequently, the Philippines' dollar reserves rose to $105 billion by the end of May 2024, providing a robust external liquidity buffer equivalent to 7.7 months of imports and payments, and covering multiple times the short-term external debt, the BSP added.