Tuesday, 5 January 2010

BOP surplus seen to exceed $5B in ’09

Jun Vallecera
Business Mirror

THE improving global economic outlook and the unrelenting industry of millions of overseas Filipinos were seen on Monday to boost the country’s balance-of-payments (BOP) surplus beyond $5 billion in 2009.

According to Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr., the latest numbers indicate the original BOP forecast of just under $5 billion will be exceeded instead.

“There is a good chance the BOP surplus will exceed $5 billion in 2009,” he told reporters.

The 11-month BOP surplus stood at only $4.08 billion, an indication of an economy that generated far more foreign-exchange earnings than it paid during the period.

According to Tetangco, the higher-than-expected surplus will draw strength from the business-process outsourcing sector, which continues to expand each month.

It should also draw strength from OFW remittances that as of end-October already grew by 4.5 percent to $14.32 billion.

This was the same sector that many experts, including those from the International Monetary Fund/World Bank Group, predicted would contract in 2009 by 20 percent as a result of the global financial downturn.

That OFW remittances instead grew in excess of 4 percent later validated an earlier BSP forecast that the foreign-exchange earnings of millions of overseas Filipinos should prove resilient, Tetangco said.

He also said the gross international reserves, which relates to the country’s capacity to pay for imports and pay for maturing external debt, should also exceed its forecast goal in 2009.

Tetangco had said the GIR in 2009 should end the year between $44.5 billion up to $45 billion.

On Monday he told reporters this was likely also to exceed $45 billion.

As for this year, the GIR was seen to range from $47 billion up to $48 billion.

“We expect the external liquidity position of the government to further improve with the projected balance of payments surplus last year,” Tetangco said.

The GIR gets a boost from the borrowing activities of both the National Government, the BSP and even the private sector.

The inward flow of foreign investments also helps fortify its level.

More important, the GIR level at present is sufficient to pay for more than eight months worth of imports or way past the global norm of just five months.

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