, May 18 , 2004
By Donnabelle L. Gatdula  -  The country’s balance of payments (BOP) swung to a $334-million surplus as of end-April as overseas worker remittances and government foreign borrowings boosted the inflow of foreign exchange, Bangko Sentral ng Pilipinas (BSP) governor Rafael Buenaventura said.

The BOP systematically summarizes, for a specific period of time, the economic transactions of an economy with the rest of the world.

Aside from reversing the deficit in the past months, the end-April BOP surplus also marked a turnaround from a deficit of $518 million in the same period in 2003.

Buenaventura noted that based on year-to-date figures, the BOP registered deficits in the first three months of 2004 of $595 million, $822 million, and $379 million, respectively.

As an indication of the continued inflow of dollar remittances from overseas workers, Buenaventura also reported that as of end-April this year, the country’s gross international reserves (GIR) have reached up to $16.405 billion.

Remittances from overseas Filipino workers for the first three months of 2004 slightly increased to $1.92 billion, from $1.84 billion in the same period in 2003.

Buenaventura likewise attributed the BOP surplus to the sustained borrowings of the BSP under the term loan facility.

The BSP chief said the increase in the foreign currency deposits of the national government also aided in pushing the BOP to a surplus.

He noted that the foreign currency inflows were partly offset by the debt service requirement of the BSP and the National Power Corp. (Napocor). The state-owned power firm spends about P1 billion yearly for the debt servicing of its almost $7 billion debts.

But Buenaventura remained optimistic that the county may end up with a minimal BOP deficit or surplus if exports continue to rise for the remainder of the year.

"We might end up with a slight deficit or slight surplus depending on exports," he said, noting that the electronics export sector remained strong and have been recording growth.

"If exports continued to be better than the first quarter performance, which there is an every indication that there would be, together with (remittances from overseas workers), I think our BOP will be okay," he said.

Exports are seen to grow this year to $7.8 billion. As of the first quarter, exports have reached $1.9 billion. The BSP is optimistic that it could meet the 10 percent exports growth projections for 2004 following developments in the US markets.

Monetary authorities also noted the significant twist in the US demand for electronics. "It is showing signs of recovery," a BSP official said.

Almost 80 to 90 percent of the country’s electronics exports go to the US market. The rest are shipped to Hong Kong and other Asian countries.

In 2003, the country’s overall BOP position reached a surplus of $111 million, a huge drop from $663 million surplus in 2002. This year though, the BSP is conservatively projecting a deficit of $660 million.

Meanwhile, the BSP also projected that the oil price benchmark Dubai crude would hit an average of $30 a barrel, which is within the government’s inflation targets. But Buenaventura said the government should also look at the coal prices in the world market.

As this developed, the BSP announced that the peso rediscount and exporters dollar and yen discount facility (EDYRF) rates applicable on loan availments by banking institutions for the month of May are: 6.161 percent for peso rediscount, which is lower by 0.455 percent as compared to last month’s rate of 6.616 percent; 0.975 percent for US dollar and 0.021875 percent for yen. The present US dollar rate is higher by 0.01 percent while the yen is lower by 0.000025 percent as compared to the April 2004 rates of 0.965 percent and 0.0219 percent, respectively.

Reported by: Sol Jose Vanzi

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