BSP revises forecasts on remittances, GIR, other economic indicators

MANILA,Oct. 14 (PNA) – The Bangko Sentral ng Pilipinas (BSP) has revised its projections on remittances and dollar reserves as inflows of money being sent home by Overseas Filipinos (OFs) continue to remain strong.

BSP Governor Amando Tetangco Jr., in a press conference before the
Philippine Economic Briefing at a Makati hotel Wednesday, said they now project remittances this year to grow by four percent from the previous projection of flat growth from the US$ 16.4 billion inflows in 2008.

The 2010 projection is a six percent growth.

As of last July, remittances grew year-on-year by 3.8 percent proving its resiliency to the global crunch.

Also, monetary officials now project gross international reserves (GIR) to reach US$ 42-43 billion this year from the earlier projection of US$ 37.5-38.5 billion and by US$ 47 billion in end-2010. The country’s balance of payment (BOP) is now projected to reach US$ 4-5 billion this year and US-4 billion next year.

Tetangco said the country’s BOP position resulted to better-than-expected surplus due to continued resiliency of
remittances.

BOP is the sum of all economic transactions of an economy with the
rest of the world.

On the other hand, exports is now projected to post bigger contraction of 20 percent from a negative growth of 13-15 percent previously while imports is now eyed at -17 percent from an earlier projected of a 8-12 percent contraction.

However, as signs of global recovery continue to show, the central bank project a seven-percent growth for exports next year while imports is projected to grow by 13 percent.

Tetangco
said inflation expectations remain well anchored amid the possible
faster rate of price increases due to the recent calamities.

He said they are maintaining their three percent and 3.4 percent average inflation forecast for this and next year but pointed out that “we will made necessary adjustments in case it needs to be adjusted.

“There is enough headroom in case there’s going to be uptick in inflation but given what we have seen in terms of prices of commodities especially vegetable we have enough headroom relative to inflation target for 2009 to 2010,” he said.

Thus, any decision to change the current policy stance of the central bank is not needed, he said, as “inflation outlook continues to be favorable.”

“The condition on the demand side credit activity as well as what we see in real sector together with the favorable inflation outlook give us room to maintain our stance in monetary policy,” he added. (PNA) LDV/JS