BOP surplus surges to $1-B in Q2 2013

MANILA, Philippines – The Philippines’ balance of payments (BOP) surplus surged to $1 billion in April-June, the central bank said Friday, September 20.

The BOP surplus rose higher than the $73 million posted in the same period in 2012 on the back of increased current and financial accounts.

Net receipts in secondary income — bouyed by the 4.8% rise in non-resident Overseas Filipino Workers’ remittances at $4.7 billion — and services accounts boosted current account.

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“Net inflows in the financial account were attributed to net inflows in the portfolio investment account,” shared the central bank.

A slow yet steady pace of global economic recovery and Japan’s sustained recovery aided the development of current and financial accounts, with a modest growth of merchandise exports being seen and investment inflows rising.

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Data also showed that BOP surplus in the first half amounted to $2.6 billion, 50% up from the $1.3 billion recorded in the same period in 2012.

The country’s BOP has been in surplus for the last 8 years, reaching a historic high of over $77 billion in January 2012. This healthy position has helped the Philippines to be classified as a “creditor” under the Financial Transactions Plan of the International Monetary Fund to which it was previously a “borrower.”

The BOP represents the country’s commercial transactions with the rest of the world. More foreign exchange inflows than outflows yield a surplus.

Foreign exchange reserves serve as buffer funds against any financial shock. Also called gross international reserves, these are what the country uses to pay for its most immediate obligations like imports and debts. – Rappler.com