RP POSTED BALANCE OF PAYMENTS SURPLUS OF $443-M IN MARCH

MANILA
, April 19, 2004
 (STAR)
By Des Ferriols - Buoyed by huge inflows from borrowing, the country posted a balance of payments surplus of $443 million in March.

Data from the Bangko Sentral ng Pilipinas (BSP) showed that the March balance of payments surplus reached $443 million due to the significant increase in gross international reserves (GIR) resulting from government foreign borrowing.

However, despite the March surplus, the first quarter balance of payments remained in deficit at $379 million.

The first quarter deficit, however, was an improvement from the $882-million shortfall recorded in the first two months of the year.

The country’s GIR went up to over $16 billion as of end-March as the National Government (NG) wrapped up its foreign borrowings for the year with its successful $200-million bond offer last month.

The BOP measures the foreign exchange transactions between the country and the rest of the world, broken down into the current account and the capital and financial account.

Trade in goods and services are recorded in the current account while loan transactions, investment flows, short term capital and other related items are recorded in the financial account.

This year, the national government has been planning a less aggressive borrowing approach with bulk of its funding requirement coming from domestic sources.

As a result, the BSP is expecting its GIR to dip close to the $14 billion level by the end of the semester before recovering somewhat in the second semester.

BSP Governor Rafael Buenaventura said, however, that the NG has made a commitment to remain flexible in its borrowing program.

"Ideally, they plan to get 70 percent from the local market and only 30 percent from foreign sources," he said.

Despite the initial dip in the GIR, Buenaventura said the BSP would retain its $14 to $15 billion target for 2004. Most credit rating agencies said their comfort level was $16 billion but he said this was a judgment call.

"That’s their comfort level," ‰ Buenaventura said. "We would like our GIR to go up, obviously but $14 to $15 billion is our realistic goal given our considerations."


Reported by: Sol Jose Vanzi

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