THE country posted a $1.2-billion balance of payments (BoP) surplus in March, the Bangko Sentral ng Pilipinas (BSP) reported on Friday, reversing from February's $196-million deficit.

It was, however, lower than the year-earlier surplus of $1.3 billion.

"The BoP surplus in March 2024 reflected inflows arising mainly from the national government's (NG) net foreign currency deposits with the Bangko Sentral ng Pilipinas (BSP) and net income from the BSP's investments abroad," the central bank said in a statement.

The reversal brought the year-to-date BoP position to a $238-million surplus, which was also lower than the $3.5 billion recorded in January-March 2023.

The central bank said that the cumulative surplus reflected "mainly the improvement in the balance of trade alongside the net inflows from personal remittances, net foreign borrowings by the NG, foreign direct investments and foreign portfolio investments."

Gross international reserves (GIR) likewise rose to $104.1 billion as of end-March from $102.0 billion a month earlier, the central bank said.

This represents "a more than adequate external liquidity buffer equivalent to 7.7 months' worth of imports of goods and payments of services, and primary income," it added.

"[I]t ensures availability of foreign exchange to meet the 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."

The GIR level was said to be also equivalent to about 5.9 times the country's short-term external debt based on original maturity and 3.7 times based on residual maturity.

Short-term debt based on residual maturity refers to outstanding external debt with an 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.

Commenting on the results, Rizal Commercial Banking Corp. chief economist Michael Ricafort said the improvement in both BoP and reserves was partly due to foreign debt payments..

The "narrowing trend of the country's trade deficit or net imports as seen in recent months" also contributed, he added.

"For the coming months, the BoP data could improve, thereby could also lead to better gross international reserves data," Ricafort said.

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