BOP surplus surges 53% to $5 B in H1

MANILA, Philippines – The country’s balance of payments (BOP) surplus jumped 53 percent in the first half of the year on the back of the central bank’s robust earnings from its investments abroad and foreign exchange operations as well as higher foreign borrowings by the government, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

BSP Governor Amando M. Tetangco Jr. said the country’s BOP surplus reached $5.016 billion from January to June this year or $1.732 billion higher than the $3.284 billion surplus booked in the same period last year.

The BOP refers to the difference of foreign exchange inflows and outflows on a particular period and represents the country’s transactions with the rest of the world.

Authorities traced the surge in BOP surplus in the first semester to strong foreign exchange inflows from investments, merchandise exports as well as remittances from overseas Filipino workers (OFWs).

For the month of June alone, the country’s BOP surplus plunged 59 percent to $222 million from a surplus of $544 million booked in the same month last year.

The country’s gross international reserves (GIR) – the sum of all foreign exchange flowing into the country – surged 41.7 percent to $68.996 billion as of end-June from $48.704 billion due to the central bank’s strong earnings from its investments abroad as well as the revaluation gains of its gold holdings amid surging gold prices in the world market.

Data showed that the BSP’s income from investments abroad surged 48.2 percent to $59.48 billion in June from $40.13 billion in the same month last year while the central bank’s gold holdings climbed 11 percent to $7.62 billion from $6.86 billion. Its earnings from foreign exchange operations plunged 29.7 percent to $359.13 million in June from a year-ago level of $510.9 million.

Latest data from the National Statistics Office (NSO) showed that the country’s merchandise exports rose by 7.5 percent to $20.625 billion in the first five months of the year from $19.185 billion in the same period last year.

On the other hand, OFW remittances climbed 6.2 percent to $7.898 billion in the first five months of the year from $7.438 billion in the same period last year.

The BSP last April decided to cut the projected growth in OFW remittances to seven percent or $20.1 billion instead of 8 percent or $20.2 billion this year due to the tensions in the Middle East and North African (MENA) states as well as the disasters in Japan.

The BSP sees the country’s BOP posting a surplus of $6.7 billion this year and $4.4 billion next year. Last year, the BOP posted a record surplus of $14.4 billion on the back of strong OFW remittances, high earnings of the business process outsourcing (BPO) sector, sustained export growth as well as surging capital flows. –Lawrence Agcaoili (The Philippine Star)