BOP remains in surplus in June

MANILA, Philippines – The Philippines continued to post a balance of payment surplus in June, boosting the confidence of government economists the revised $2 billion surplus for this year would be achieved.

Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. yesterday reported the Philippines booked a BOP surplus of $418 million in June. The figure, however, was 13.8 percent lower than the $485 million surplus registered in the same month last year.

This is the fourth straight month since March that the Philippines has been recording a BOP surplus.

The Philippines incurred a BOP deficit of $813 million in January and $251 million in February before bouncing back in March with a surplus of $854 million, $184 million in April, $241 million in May, and $418 million in June.

This brought the BOP surplus at $634 million in the first half, 62.3 percent lower than the $1.68 billion surplus booked in the same period last year.

Tetangco traced the surplus of the foreign exchange operations of the central bank, income from the BSP’s foreign investments as well as the net dollar deposits from the national government.

He pointed out the inflows were partially offset by the payments for the maturing foreign exchange obligations of the national government.

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.

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.

Tetangco said the revised BOP surplus target is attainable with the improving financial markets as well as the stable peso.

“I think so. We expect improvement in foreign flows during the rest of the year. In fact we have seen it start already in July,” he said.

The Philippines recorded a $2.62 billion BOP surplus last year, reversing the $2.86 billion deficit registered in 2014. The amount was well above the $2 billion surplus expected by the BSP for 2015.