MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has offered to sell US dollars to the National Government to capitalize the proposed sovereign wealth fund.
On the sidelines of the national convention of the Chamber of Thrift Banks (CTB), BSP Governor Amando V. Tetangco Jr. said the country’s economic team led by Finance Secretary Cesar Purisima is proposing to establish a sovereign wealth fund, which would be government’s tool to make investments in the open or international market as another instrument for raising funds. However, the wealth fund must be capitalized with US dollars.
“If the government decides to put up the wealth fund, we can sell them the dollars which they can use to fund their operations especially overseas,” Tetangco said.
He explained that in other countries in the region, governments invest in different types of instrument, mostly offshore.
“And usually they have a separate entity outside their respective central banks to organize, manage and run the sovereign wealth fund,” Tetangco added.
But since there are legal constraints in allowing the BSP from directly overseeing the proposed sovereign fund, the Philippine government can establish a separate entity to manage the fund.
Meanwhile, the country’s balance of payments (BOP) in February experienced a deficit of $960 million, the first since April 2012.
In January this year, the country registered a $2.043-billion surplus.
Thus, the year-to-date surplus was reduced to $1.083 billion as of February as compared to $2.043 billion the previous month. In February 2012, the government experienced a deficit of $588 million, bringing the BOP at $1.452 billion.
In December 2012, the country had a surplus of $9.236 billion. It was at its highest in December 2010 at $14.308 billion.
The balance of payments (BOP) is a summary of the economic transactions of a country with the rest of the world, for a specific time period. It serves as an accounting statement on the economic dealings between residents of the country and non-residents.