BSP lowers 2012 targets for GIR, BOP amid western woes

MANILA, Philippines (UPDATED) – The Bangko Sentral ng Pilipinas (BSP) cut its targets for gross international reserves (GIR) and balance of payments (BOP) this 2012 amid economic uncertainties that may impact investments.

The GIR projection was lowered to a range of $77.5 billion to $78 billion from the previous from $79 billion. The BOP surplus was also lowered to $2.6 billion from $2.8 billion.

“The revisions to the latest figures, actual figures and also the prospects for future inflows given the developments that are taking place in Europe as well as the United States,” BSP Governor Amando Tetangco Jr.  told reporters at the sidelines of a financial forum on June 18.

“You will notice that there has been a slight decrease in the BOP (balance of payments) surplus but it’s still a surplus notwithstanding the difficulties that are facing the global economy,”

The Philippines only achieved a surplus on its balance of payments of $10.2 billion in 2011. Back then, it was already down 28.8% from 2010.

In 2011, the BSP also attributed the drop to economic issues in Europe and the US, which it said lowered investor confidence and dented foreign exchange inflows

Tetangco added that the downward adjustments considered expectations that foreign investments would be less. These have been felt in the drop in foreign portfolio and direct investments in recent months.

Last March, foreign direct investments dropped a massive 91% to $14 million. Last April, portfolio investments or hot money dropped 51% to $333.43 million. These were blamed mainly on the eurozone woes.

Nonetheless, Tetangco stressed that dollar earners — remittances and exports — remain healthy. The BSP is keeping original respective forecasts of 5% and 10% this 2012. – Rappler.com