Monday, 6 September 2010

August BOP edges closer to $50B

August BoP surplus higher
by Roderick T. dela Cruz
Manila Standard

The Philippines posted another balance of payments surplus in August, pushing the gross international reserves to about $49 billion at the end of the month and on its way past $50 billion by the end of the year.

“It is going to be higher than the BoP surplus in July,” Bangko Sentral Gov. Amando Tetangco Jr. said of the figure in August, which will be officially released around the middle of the month.

Bangko Sentral reported that the BoP yielded a surplus of $91 million in July, boosting the cumulative figure in the first seven months of the year to $3.326 billion.

Tetangco said it was possible the GIR would exceed the $50-billion mark this year with the strong BoP surplus.

Tetangco said remittances, investments, business process outsourcing revenues, government borrowings and foreign exchange inflows of Bangko Sentral were supporting the balance of payments.

Sources said the country’s BoP position would be further augmented by a $1-billion inflow in the second half of the year, following the recent approval by the Monetary Board of the planned $1-billion global bond issue by the government.

The government is floating the global bond issue with a tenor of up to 10 years to help finance its budget deficit this year and next, sources added.

Tetangco said the government would review its projection for BoP and GIR by November, to take into account the latest trends.

“The way it looks, we may exceed the BoP surplus projected for 2010. We will be reviewing the numbers and release the updated projections by November,” he said.

The BoP, which represents the country’s transactions with the rest of the world, is expected to end the year with a surplus of $3.7 billion, and shore up the gross international reserves to about $49 billion to $50 billion.

Tetangco said the Philippines was one of the emerging economies experiencing increased foreign exchange inflows.

He said the BoP surplus would provide fundamental support to the Philippine peso.

“It can also be affected by what is happening to the US dollar, investors’ sentiment, and the global economic recovery. It is responding to a lot of different factors, but BoP will give the fundamental support,” he said.

The peso bounced back to 44.69 against the US dollar on Friday, in line with the rebound of emerging market currencies and equities.

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