BSP lowers BOP surplus forecast

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has lowered the country’s balance of payments (BOP) surplus target to $2 billion instead of $2.2 billion this year due to weak global demand.

The country’s BOP position reverted to a deficit of $210 million in the first quarter from a surplus of  $877 million in the same quarter last year due to higher net outflows.

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

A surplus means more money went into the economy, while a deficit means otherwise.

On the other hand, BSP Deputy Governor Diwa Guinigundo said the BSP raised its current account (CA) surplus projection to $5.8 billion or 1.9 percent of gross domestic product (GDP) instead of $5.7 billion or 1.7 percent of GDP this year.

“This is due to the expected higher receipts from the services and primary income accounts. This notwithstanding the expected widening of the trade deficit with the larger downward revision in the level of exports than that of imports,” the central bank said.

The BSP lowered its export growth target to three percent instead of five percent this year in light of the “subdued outlook for the global economy and further decline in commodity prices.”

Likewise, the BSP slashed its import growth target to seven percent instead of 10 percent this year on account of the decline in energy and metal prices.

In the first quarter, data released by the BSP showed the country’s CA surplus fell 79.4 percent to $447 million or 0.6 percent of GDP from $2.16 billion or 3.2 percent of GDP in the same period last year as merchandise exports fell while imports increased.