MANILA, Philippines - Monetary authorities remain bullish on the projected balance of payments (BOP) surplus this year despite the debt crisis in Europe, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. said.
Tetangco said the country’s BOP position would remain positive unless the crisis in the Eurozone worsen.
“The foreign exchange inflows into the country have remained generally orderly, despite the difficulties in Europe. Unless the situation in Europe escalates, we expect that this positive trend would continue,” the BSP chief stressed.
He pointed out that the BOP surplus for June was mainly to central bank’s foreign exchange operations and income from investments abroad as well as deposits from commercial banks.
Latest data from the BSP showed that the country’s BOP surplus went up by 46 percent to $3.235 billion in the first half of the year from $2.216 billion in the same period last year.
The BOP refers to the difference of foreign exchange inflows and outflows on a particular period and represents the country’s transactions with the rest of the world.
For the month of June alone, the BOP surplus reached $502 million or almost seven times the $73- million surplus booked in the same month last year.
The BSP’s Monetary Board sees the country’s BOP surplus hitting $3.7 billion instead of the original target of $3.2 billion due to robust foreign exchange inflows from the higher investment inflows, disbursement of official development assistance (ODA) loans from multilateral lending agencies, and the money sent home by Filipinos abroad.
The country’s BOP surplus plunged to $89 million in 2008 from $8.67 billion in 2007 due to the full impact of the global financial crisis. The BOP position recovered last year with a surplus of $5.295 billion. This year’s surplus would stabilize as the growth of imports would outpace the growth of exports.
Early this month, monetary authorities revised upwards this year’s gross international reserves (GIR) forecast as the country’s reserves hit a new record level of $48.7 billion as of end-June on the back of strong exchange inflows from higher income from the central bank’s foreign exchange operations, investments abroad, and gold holdings.
BSP Governor Amando Tetangco Jr. earlier said authorities now see GIR hitting a high of $50 billion instead of the revised forecast of $48 billion to $49 billion this year.
The GIR, which refers to the sum of all foreign exchange flowing into the country, last June was $738 million higher than the end-May level of $47.689 billion and $8.83 billion higher than the $39.589 billion registered in June last year.
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The increase came basically from foreign exchange operations of the BSP that resulted to an increase in foreign exchange inflows particularly remittances from overseas Filipinos and business process outsourcing (BPO) sector as well as the strong foreign portfolio investments and recovering export earnings.
The BSP also now projects an eight-percent rise in OFW remittances instead of six percent this year from a record $17.348 billion last year. OFW remittances grew 6.6 percent to $7.44 billion in the first five months of the year from $6.98 billion in the same period last year after it hit a record level of $1.578 billion in May.
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Source: Philippine Star