crown89 BOP swings back to $3.7-B surplus in Q3

The country’s balance of payments (BOP) position swung back to a surplus of $3.7 billion in the third quarter of the year, reversing a $524-million deficit from a year ago.

“The significant increase in net inflows in the financial account led to a reversal to BOP surplus,” the Bangko Sentral ng Pilipinas (BSP) said in a statement following the release of the BOP data for the month.

The BOP summarizes the country’s economic transactions with the rest of the world.

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READ: BOP swung to $724-M deficit in October, highest in 9 months

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A surplus arises when more foreign funds enter the economy against those that left during a period, giving the country more dollar resources that it can use to transact with the rest of the world.

A deficit is the result if the reverse happens.

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The latest monthly posting brought the country’s BOP from January to September to a surplus of $5.1 billion, which is higher than the $1.7 billion surplus recorded during the same nine-month period in 2023.

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“The BOP surplus reflected mainly the significantly higher net inflows from the financial account,” the BSP said, commenting on the year-to-date number.

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The BSP said that the country’s gross international reserves (GIR) amounted to $112.7 billion as of the end of September, higher than the $98.1 billion level that was recorded at the same time last year.

The GIR serves as the country’s buffer against external shocks.

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These reserve assets consist of foreign investments of the central bank, gold and foreign exchange, as well as borrowing authority with the International Monetary Fund and the country’s contributions to the United Nations-backed financial institution.

Authorities last month unveiled several stimulus policies – from interest rate cuts to relaxing home-buying rules – after struggling since the end of Covid restrictions to reignite growth and get business activity back on track.

Two years later, plans to repurpose the country’s oldest coal power plant have amounted to little in a process that offers caution and lessons for countries intending to reduce their reliance on fossil fuels and switch to renewables.

The country’s central bank also said that the peso averaged at P57.25 per $1 during the third quarter of the year.

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This meant it appreciated by 1 percent from an average of P57.80 per $1 in the second quarter of the yearcrown89, and depreciated by 2.3 percent from an average of P55.96 per $1 during the same quarter in 2023. —Alden M. Monzon INQ

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