Category : Press Release
Date : February 01, 2021
Agency : Bangko Sentral ng Pilipinas
Title : BOP in December 2020 Posts US$4.24 Billion Surplus; Full-Year 2020 BOP Surplus at All-Time High of US$16.02 Billion & End-2020 GIR Level Rises to US$110.12 Billion
Article : The country’s overall balance of payments (BOP) position posted a surplus of US$4.24 billion in December 2020, which is significantly higher than the US$1.57 billion BOP surplus recorded in December 2019. The BOP surplus in December 2020 reflected inflows mainly from the BSP’s foreign exchange operations and income from its investments abroad, and National Government’s (NG) foreign currency deposits with the BSP of proceeds from its issuance of ROP Global Bonds. These inflows were partly offset, however, by the NG’s payments of its foreign currency debt obligations.

With the December outturn, the full-year 2020 BOP surplus reached an all-time high of US$16.02 billion. This level is more than two times higher compared with the US$7.84 billion BOP surplus recorded in 2019. Higher net foreign borrowings by the NG and lower merchandise trade deficit, along with sustained net inflows from personal remittances, foreign direct investments, and trade in services accounted for the favorable performance in 2020.(1)

The BOP position reflects an increase in the final gross international reserves (GIR) level to US$110.12 billion as of end-December 2020 compared with US$104.82 billion as of end-November 2020. The latest GIR level represents an adequate external liquidity buffer, which can help cushion the domestic economy against external shocks.(2) This is equivalent to 11.8 months’ worth of imports of goods and payments of services and primary income. Moreover, it is also about 9.5 times the country’s short-term external debt based on original maturity and 5.4 times based on residual maturity.(3)
?1 Based on the International Merchandise Trade Statistics (IMTS) of the Philippines published by the Philippine Statistics Authority (PSA) for January-December 2020, personal remittances from overseas Filipinos for January-November 2020, foreign direct investments for January-October 2020 and trade in services for January-September 2020.
2 Specifically, it ensures availability of foreign exchange to meet balance of payments financing needs, such as for payment of imports and debt service, in extreme conditions when there are no export earnings or foreign loans.
3 Short-term debt based on residual maturity refers to outstanding external debt with original maturity of one year or less, plus principal payments on medium- and long-term loans of the public and private sectors falling due within the next 12 months.

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