Philippines posts BOP surplus in May

MANILA, Philippines - The Philippines enjoyed another balance of payments (BOP) surplus in end May after recording three straight months of surpluses amid strong inflows in the run-up to the May 9 polls, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

Data showed the country recorded a BOP surplus of $241 million in May, reversing a $58 million deficit recorded in the same month last year.

The Philippines posted a BOP deficit of $813 million in January and $251 million in February before bouncing back in March with a surplus of $854 million and $184 million in April.

BSP Governor Amando Tetangco Jr. said the surplus for May was mainly due to inflows from BSP operations and income from investments abroad.

Tetangco said the inflows more than offset the payments for the maturing foreign exchange obligations of the national government.

For the five-month period, the country recorded a BOP surplus of $216 million, 82 percent lower than the $1.2 billion surplus registered in the same period last year.

The BOP shows a summary of a country’s transactions with the rest of the world. A deficit means more money went out of the economy, while a surplus means otherwise.

The BSP earlier said the overall BOP surplus this year is expected to taper to $2 billion instead of the previous projection of $2.2 billion.

The revised BOP projections incorporated the latest available data and reflect recent and prospective economic developments that could have a bearing on the outlook for the country’s external payments position.

“The $2 billion projected BOP surplus for full year is attainable, given the information we have now,” Tetangco said.

On the other hand, 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 due to the expected higher receipts from the services and primary income accounts amid the expected widening of the trade deficit.

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.

Remittances from overseas Filipinos grew 3.1 percent to $8.67 billion in the first four months of the year from $8.41 billion in the same period last year.

Likewise, investments picked up after a peaceful elections last May 9 wherein President elect Rodrigo Duterte emerged as the clear winner.

Foreign portfolio investments or “hot money” booked a net inflow of $72.81 million reversing a net outflow of $569.27 million in the same month last year. However, the net inflow only amounted to $129 million in the first five months of the year or 89.9 percent lower versus the $1.16 billion net inflow in the same period last year.