THE country’s balance of payments position in September swung to a surplus of $24 million from a deficit of $7 million a month ago, driven primarily by the foreign exchange operations and investment income from abroad of the Bangko Sentral ng Pilipinas, deputy governor Diwa Guinigundo said Friday.
The September surplus was, however, lower than the $117-million surplus recorded a year ago. This trimmed the BoP deficit in the first nine months to $1.367 billion from a $1.391-billion gap a month ago.
“The modest BoP surplus [was] derived directly from the BSP’s foreign exchange [operations and] investment income from abroad but moderated by the national government’s debt servicing requirements,” Guinigundo said in a statement.
He said economic fundamentals were encouraging, citing that exports had begun to recover in the last eight months while import growth decelerated.
“Cash remittances continue to be robust while BPO revenues have been reported to be resilient at around 10 percent growth. We hope we can keep the BoP shortfall at modest volume given the good outturn in portfolio investment in August and small overhang in September,” Guinigundo said.
Latest data showed cash remittances by Filipinos working overseas accelerated to a five-month high of 7.8 percent in August 2017 to $2.499 billion from $2.319 billion a year ago, driven mainly by sustained demand for local skilled workers abroad. This brought cash remittances in the first eight months to $18.595 billion, up 5.4 percent from $17.642 billion in the same period last year.
The balance of payments summarizes the country’s economic transactions with the rest of the world, with a deficit indicating that foreign exchange payments exceed inflows. A BoP deficit affects the value of the peso against the US dollar and eats into the country’s gross international reserves.
Earlier, Guinigundo said the current account, one of the main components of the balance of payments, posted a lower deficit of $234 million in the first half of the year from a $424-million gap a year ago.
The deficit accounted for around 0.2 percent of GDP, lower than 0.3 percent of GDP in the same period last year.
Guinigundo said the improvement in the current account was driven by increased net receipts in the trade-in services, and secondary and primary income accounts which partly negated the widening deficit in the trade-in goods account.
Bangko Sentral expects the balance of payments to post a $500-million shortfall this year, a revision of the previous estimate of a $1-billion surplus, due to the expected uneven growth prospects of the world’s major and advanced economies.
It also saw the current account reversing to a deficit of $600 million this year from the actual surplus of $600 million last year.