BOP  POSTS  SURPLUS  OF  $3.1 BILLION  IN  FIRST  6 MONTHS  OF  YEAR

MANILA, JULY 17, 2007
(STAR) By Des Ferriols - The country’s balance of payments (BOP) surplus hit $3.1 billion in the first six months of the year, rising by 56 percent annually as the June surplus alone reached $834 million.

Data from the Bangko Sentral ng Pilipinas (BSP) indicated that in June alone, foreign exchange inflows pushed the surplus to its highest level so far this year.

In the same period last year, the surplus was recorded at $2.04 billion and by yearend, the surplus topped all previous records and reached $3.769 billion.

The BSP projects that the country’s BOP would stay in surplus albeit lower than the 2006 level at $2.90 billion.

BSP Governor Amando M. Tetangco Jr. said the performance in the first half of the year was the result of sustained inflows of foreign exchange which brought the gross international reserves (GIR) at $26.4 billion.

The BOP represents what is left over of the country’s total foreign exchange reserves after all its transactions with the rest of the world. The higher the surplus, the better is the BSP’s comfort level that it would be able to protect the peso from excessive fluctations.

According to Tetangco, continued foreign inflows came mainly in the form of remittances from overseas Filipino workers (OFWs), merchandise exports, foreign investments and investments income of the BSP.

“The surplus was achieved even with debt servicing that included debt repayments,” Tetangco said.

The BSP estimated earlier in the year that the BOP surplus would be around $2 billion but Tetangco said the emerging range now being looked at was $2.4 billion to $2.9 billion.

This is still significantly lower than the actual BOP surplus in 2006 but Tetangco said the BSP preferred to take a conservative position in anticipation of more unpredictable factors such as movements in world oil prices.

At this level of BOP surplus, Tetangco said the BSP experts the GIR to range between $26 billion and $26.6 billion by year-end.

“We are reviewing our projected remittances from overseas Filipinos as well as foreign direct and portfolio investments,” he said. “We’re retaining the exports growth projection of around 11 percent, though.”

The BSP had projected remittances to reach $14.7 billion this year but officials said there are indications that actual remittances would be higher than this original projection.

According to the BSP, the reserves also surged on the strength of receipts from investment income abroad, as well as proceeds of the BSP’s share from the release of collateral on the Brady Bonds which were prepaid by the National Government in April 2007.


Chief News Editor: Sol Jose Vanzi

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