ASEAN KEY DESTINATIONS
Philippines bank looks at balance of payments
A summary of the country’s economic transactions with the rest of the world, the BOP is in surplus when dollar receipts outweigh payments. A deficit, on the other hand, entails payments outstripping receipts, and so erodes the country’s dollar reserves, which in turn weakens the peso and bids up domestic inflation.
Even though the dollar reserve figure for the first eight months has yet to come out, preliminary indications suggest that the country’s BOP may have registered another surplus for the period, bank Governor Amando Tetangco Jr. said.
“I think it’s going to be higher than [the] BOP surplus in July. We will have a better, firmer figure once we get the end-August reserve figure,” he told reporters.
The BOP registered a surplus of $91 million in July, albeit lower than the $506 million registered in the same period last year.
The July figure brought the BOP to a cumulative surplus of $3.3 billion in the first seven months of the year, or 22.2-percent higher than the $2.722 billion recorded last year.
For this year, the central bank projects a full-year BOP surplus of $3.7 billion, higher than an earlier forecast of $3.2 billion, assuming the country’s current account position will continue to improve.
Current account transactions cover trade in goods, services, income and current transfers.
The BSP expects these transactions will improve to $8.6 billion this year, accounting for 4.6 percent of the country’s gross domestic product, from earlier projections of $4.5 billion. According to monetary authorities, the current account will get a boost from exports and imports growth amid a better-than-expected expansion in the first quarter.
The central bank had revised its exports growth projection to 15 percent from 12 percent previously, and imports growth to 20 percent from 18 percent earlier.
As a result, the country’s gross international reserve (GIR) is expected to reach about $49 billion to $50 billion this year, up from an earlier estimate of $48 billion to $49 billion.
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