Phl posts $274-M BOP surplus in April

MANILA, Philippines - The country’s balance of payments (BOP) hit a surplus of $274 million in April, reversing a deficit last year and bringing the year-to-date tally closer to official forecast, the central bank reported yesterday.

BOP – which summarizes all inflows and outflows in an economy – swang back to a surplus last month after the previous year’s $74-million deficit, data from the Bangko Sentral ng Pilipinas (BSP) showed.

A surplus indicates more than enough resources for an economy to meet its external trade obligations and settle foreign debts.

For the first four months, BOP recorded a surplus of $1.809 billion, more than half the $3-billion forecast by the BSP for the year. BOP posted a surplus of $9.236 billion for 2012.

BOP has two components: the current and capital accounts. Current account includes receipts from tourism, business process outsourcing, exports and imports, as well as remittances, while capital account records those coming from foreign direct and portfolio investments.

Over the years, the central bank has noted that the BOP has been supported by large remittances coming from Filipinos abroad. This, it has said, has offset weakness in trade performance.

The good BOP numbers also contribute to large foreign exchange reserves, which have hit record-highs for the past year. As of April though, gross international reserves were pegged at $83.380 billion, 0.6 percent down month-on-month.

The BSP has said it is reviewing its BOP forecast and may revise it soon.

BSP Governor Amando Tetangco has said the central bank has no plans to impose controls on portfolio inflows at the moment despite expectations of more inflows after the country received its second investment grade rating from Standard & Poor’s this month.

The central bank has spent billions of pesos to shield the peso and economy from the impact of large inflows of foreign money.

The BSP liberalized rules on foreign currency transactions on Thursday, allowing residents to invest in property abroad and offshore funds, in a bid to encourage buying of dollars and stem the rise of the peso.

Analysts in a Reuters poll expect the currency to strengthen against the dollars, with the median forecast of 39.45 to the dollar by end-March 2014.