THE Philippines’ balance of payments surplus plummeted in October amid slowing global growth created by uncertainties in advanced economies, the Bangko Sentral ng Pilipinas (BSP) said on Friday.
Data from the BSP showed that the country’s BOP registered a surplus of $208 million in October, down by more than 92 percent from $2.736 billion in the same month last year.

Last month’s figure, however, brought the cumulative surplus to $9.93 billion, up 8.17 percent from $9.179 billion in the same 10-month period last year.

BSP Governor Amando Tetangco Jr. said Asia was not spared from the effects of persistent global turmoil, which was reflected in volatile movement in regional currencies, increased risk aversion and waning market confidence.

BOP is a summary of a country’s economic transactions—such as current and capital and financial accounts—with the rest of the world.

Exports and imports, services, income and current transfers fall under the current account.
Exports went down by 27.4 percent to $3.88 billion in September from $5.34 billion last year, the sharpest fall in more than two years because of plummeting electronics shipment and weak demand from Japan, US and China.

Inflows from the foreign exchange operations of the BSP and income from investments abroad and foreign currency deposits of the national government contributed to the BOP surplus during the period.

Remittances—as receipts recorded under the income sub-account—have been resilient, growing by 8.4 percent to $1.7 billion in September from $1.6 billion in the same month last year.

The country’s holdings of currency and deposits also form part of the other investments under the BOP.

Philippine gross international reserves improved to $75.814 billion in October, up 32.65 percent from the $57.153 billion in the same month last year.

The BSP holds international reserves for the foreign exchange requirements of the country in case the domestic commercial banks’ supply of dollar and other convertible currencies falls short of demand.

The foreign assets that the BSP holds are mostly in the form of investments in foreign-issued securities, monetary gold and foreign currency, of which 13 percent is in US dollars.

An ample GIR level helps the peso to strengthen, thereby keeping domestic inflation at bay.

Monetary authorities have been saying that despite uncertainties in advanced economies, they expect the reserve buildup to continue as a consequence of a favorable BOP development.