The country’s overall balance of payments (BOP) position posted a surplus of US$2.1 billion in September 2020, bringing the year-to-date surplus position to US$6.88 billion.

The BOP surplus in September 2020 reflected mainly the inflows from the BSP’s foreign exchange operations and income from its investments abroad, and the National Government’s (NG) foreign currency deposits with the BSP.

These inflows were partly offset, however, by the NG’s payments of its foreign currency debt obligations.

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The cumulative BOP surplus of US$6.88 billion was higher than the US$5.57 billion surplus recorded for the same period a year ago.

Based on preliminary data, the current BOP surplus was supported mainly by higher net foreign borrowings by the NG and lower merchandise trade deficit along with sustained net inflows from foreign direct investments, personal remittances, and trade in services.

The BOP position reflects an increase in the final gross international reserves (GIR) level of US$100.44 billion as of end-September 2020 compared with US$98.95 billion as of end-August 2020.

At US$100.44 billion, the GIR represents a more than adequate external liquidity buffer, which can cushion the domestic economy against external shocks.

This is equivalent to 10 months’ worth of imports of goods and payments of services and primary income.

Moreover, it is also about 9 times the country’s short-term external debt based on original maturity and 5.4 times based on residual maturity.