The country’s balance of payments (BOP) position posted a surplus of USD642 million in December last year.

Data released by the Bangko Sentral ng Pilipinas (BSP) on Friday showed that the surplus last month was higher than the USD612-million surplus in December 2022.

“The BOP surplus in December 2023 reflected inflows arising mainly from the National Government’s (NG) net foreign currency deposits with the Bangko Sentral ng Pilipinas (BSP), net income from the BSP’s investments abroad, and the BSP’s net foreign exchange operations,” the BSP said.

For full-year 2023, the BOP position posted a surplus of USD3.7 billion, reversing the USD7.3 billion deficit in 2022.

“Based on preliminary data, this development reflected mainly the improvement in the balance of trade alongside the higher net inflows from personal remittances, trade in services, and foreign borrowings by the NG,” the BSP noted.

“Further, net inflows from foreign direct investments contributed to the surplus, albeit lower during the period,” it added.

The BOP is a summary of the economic transactions of a country with the rest of the world for a specific period.

The overall position can be in surplus, in deficit, or in balance.

A surplus increases international reserves.

BSP data showed that the gross international reserves (GIR) level went up to USD103.8 billion as of end-December 2023 from USD102.7 billion a month earlier.

The BSP said the latest GIR level represents more than the adequate external liquidity buffer equivalent to 7.8 months’ worth of imports of goods and payments of services and primary income.

Rizal Commercial Banking Corporation chief economist Michael Ricafort said in the coming months, BOP data may continue to improve due to the continued increase in structural inflows.

“For the coming months, BOP data could still improve with the continued growth in the country’s structural inflows as the economy reopens further towards greater normalcy, in terms of the continued year-on-year growth of OFW remittances, BPO revenues, foreign tourism receipts, POGO revenues, among others,” he said. (PNA)