January-June 2019 BOP position reverses to surpius 

September 13, 2019

The country's balance of payments position (BOP) for January to June recorded a surplus of $4.8 billion, a turnaround from the $3.3 billion deficit posted in the same period last year, the Bangko Sentral ng Pilipinas (BSP) said Friday.

The surplus was a result primarily of the marked increase in net inflows in the financial account combined with the narrowing of the the deficit in the current account. 

 The current account deficit in the first half narrowed to $1.7 billion from $3.8 billion in the same period last year.

This developed as a result of the higher net receipts in the primary income ($2.5 billion from $1.5 billion), trade-in-services ($5.9 billion from $4.9 billion), and secondary income accounts ($13.3 billion from $13.2 billion) and as the deficit in the trade-in-goods account posted a marginal increase ($23.5 billion from $23.3 billion). 

Capital account registered higher net receipts of $33 million in the first six months from $30 million in the same period last year.

This resulted following lower payments made on acquired non-produced non-financial assets at $9 million compared to the $20 million in the previous year. 

The financial account recorded higher net inflows (or net borrowing of residents from the rest of the world) of $5.7 billion in the first half compared to $2.5 billion net inflows posted in the same period in 2018.

The BOP position registered a surplus of $991 million in the second quarter, a reversal of the $2 billion deficit in the same quarter last year.

The surplus stemmed from net inflows (i.e., net borrowing by residents from the rest of the world) in the financial account, albeit lower, mainly on account of the reversal of portfolio investments to net inflows and the sustained net inflows in the direct investment account.

The financial account continued to post net inflows on the back of the positive growth outlook as the country's macroeconomic fundamentals remained stable.

Meanwhile, the current account registered a lower deficit due to the narrowing of the trade-in-goods deficit combined with increased net receipts of trade-in-services, and in the primary and secondary income accounts during the quarter. DMS