The Bangko Sentral ng Pilipinas (BSP) on Friday reported the country’s international transactions or balance of payments (BOP) in the third quarter resulted in a surplus of $3.7 billion, a reversal of the $524 million deficit recorded in the same period a year ago, as investments in the capital market grew.

BSP said the BOP surplus in the third quarter led to a nine-month surplus of $5.1 billion as of September from the $1.7 billion surplus posted in the same period in 2023.

For the third quarter alone, the financial account expanded to $10.5 billion from $2 billion as foreigners placed more funds for direct investments at $1.9 billion from $1.4 billion.

Portfolio investments, which consist of various asset classes, also grew to $2.7 billion from 1.7 billion.

However, the current account contracted by 154.4 percent to $5.7 billion from $2.2 billion as incomes from goods and services exports fell.

Exports weaken

BSP data showed exports declined to $26.4 billion from $27.1 billion.

Meanwhile, the capital account expanded by 19.4 percent to $20 million from $16 million.

“This developed on the back of higher receipts from gross disposals of non- produced, non-financial assets at $3 million from $400,000,” BSP said.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said more investments might come into the country after the government approved the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy.

Under the new law, registered business enterprises will pay lower corporate income taxes at 20 percent from 25 percent.

Ricafort said this will boost production in key industries, while the BSP’s policy rate adjustment keeps inflation rates low or within its target of 2 to 4 percent, spurring high household consumption and company earnings.

He expects the BSP to further ease its policy rate next week, signaling lower or stable inflation in the short-term.

“It’s possible that the BSP will impose a 25 basis point-cut on December 19,” Ricafort said.