BOP sustains surplus in April

MANILA, Philippines - The country’s balance of payments (BOP) position remained in surplus in April amid the sustained inflows, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

Data showed the country enjoyed a BOP surplus of $184 million in  April, 51.6 percent lower than the $380 million surplus registered in the same month last year.

The Philippines received a BOP deficit of $813 million in January and $316 million in February before bouncing back in March with a surplus of $854 million.

The surplus was sustained in April amid strong inflows.

For the first four months, the country recorded a BOP deficit of $90 million, down from a $1.26 billion surplus in the same period last year.

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 deficit means more money went out of the economy while a surplus means otherwise.

BSP Governor Amando Tetangco Jr. said the surplus in April could be traced mainly to foreign exchange deposits of the national government and income from BSP operations.

Tetangco said the surplus in April helped reduce the cumulative deficit for first four months of the year with the sustained economic growth as the country’s gross domestic product (GDP) expansion accelerated to 6.9 percent in the first quarter from the revised 6.5 percent in the fourth quarter.

“With the good GDP release and continued buoyancy in the domestic financial markets, we expect a reversal in the overall cumulative BOP position to a surplus going forward,” Tetangco said.

The BSP sees the country’s BOP position registering a surplus of $2.2 billion or 0.7 percent of GDP this year.

Aside from the national government’s deposits with the BSP and income from BSP’s investments abroad, remittances, business process outsourcing (BPOs), and tourist receipts also brought in additional inflows.

Cash remittances from Filipinos abroad rose 4.4 percent to $6.56 billion in the first quarter from $6.28 billion in the same period last year. The BSP sees OFW remittances growing four percent this year.

Likewise, net foreign direct investment (FDI) inflows jumped 50.6 percent to $936 million in the first two months from $622 million in the same period last year on the back of the country’s strong macroeconomic fundamentals.