Tuesday, 20 October 2009

BoP hit surplus of $502M in Sept.

Ronnel Domingo
Philippine Daily Inquirer

THE COUNTRY’S BALANCE OF payments (BOP) hit a surplus of $502 million in September as the amount of remittances from overseas Filipinos continued to climb.

This development prompted the Bangko Sentral ng Pilipinas to again raise its forecast for the year.

Based on BSP data, the BOP remained at a surplus in the past four months, swinging back and forth from less than $100 million to $500 million.

The latest figure brought the BOP for the nine months to September to a surplus of $3.277 billion—128 percent higher than the surplus of $1.54 billion seen in the same period last year.

The BOP is a closely watched economic indicator that reflects a country’s foreign exchange liquidity. The level of liquidity will determine a country’s ability to engage in commercial transactions with the rest of the world.

Factors that help boost the country’s BOP include foreign investments, income from exports, remittances from overseas Filipinos, foreign currency-denominated loans extended to the government, and the BSP’s income from its investments abroad.

According to monetary authorities, remittances from overseas Filipinos coursed through banks in August increased year-on-year by 2.8 percent to $1.37 billion.

This brought the cumulative remittances during the eight months to August to $11.34 billion—an increase of 3.7 percent from that of last year.

The BSP said growth in remittances was mostly driven by the deployment of more Filipino workers abroad.

From January to August, major sources of remittances were the United States, Canada, Saudi Arabia, United Kingdom, Japan, Singapore, United Arab Emirates, Italy and Germany.

In a report dated Oct. 16, ATR Kim Eng Securities said there would be “a considerable increase” in remittances in September to early October in the aftermath of two storms that devastated Luzon.

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