PH balance of payments exceeds 2015 target

MANILA, Philippines – The country’s balance of payments (BOP) position booked a $2.04-billion surplus from January to July period, exceeding the full-year target of $2 billion, the Bangko Sentral ng Pilipinas (BSP) reported Wednesday, August 19.

BOP shows a summary of a country’s transactions with the rest of the world. Components include trade, foreign direct and portfolio investments, and remittances from Filipinos abroad.

BSP Deputy Governor Diwa Guinigundo said in a text message that the surplus recorded in the first 7 months of the year already surpassed the 2015 BOP surplus target of $2 billion.

The surplus was also a complete reversal of the $3.64-billion deficit booked in the same period last year. In June, the country booked a BOP surplus of $485 million, reversing a $24-million deficit registered in the same month last year. (READ: PH balance of payments reverts to surplus in June)

Surplus

For July alone, the central bank said the country booked a surplus of $354 million or 29.3% lower compared to $501 million in the same month last year.

Guinigundo said the surplus booked in July was derived from BSP’s various foreign exchange operations, including investments abroad and foreign exchange deposits from the national government. A surplus means more money went into the economy.

“This was made possible by the sustained foreign exchange inflows from remittances, business process outsourcing (BPO) sector, and foreign portfolio investments,” he added.
 
The surplus position was moderated by the national government’s external debt payments,  Guinigundo said.
 
In May, the BSP revised upwards its BOP forecast to a surplus of $2 billion from an earlier projected surplus of $1 billion. It also raised the country’s current account surplus forecast to $14.2 billion, from an earlier estimate of $6.8 billion. (READ: BSP revises BOP 2015 forecast to $2 billion)
 
But external developments, including the impending interest rate hike by the US Federal Reserve as well as the recent weakening of the Chinese yuan and Vietnamese dong could affect foreign exchange markets in the region,  Guinigundo said.

Monetary authorities are cautiously optimistic the Philippines would be able to withstand external shocks on the back of the country’s strong and sound macroeconomic fundamentals, he added. – Rappler.com