by Roderick T. dela Cruz
Strong dollar inflows in August pushed the balance of payments position of the Philippines to a surplus of $9 billion in the first eight months of 2011, putting it on track to surpass the record level achieved in 2010.
The January-August BoP surplus rose 166 percent from $3.381 billion year-on-year. The BoP surplus hit a record $14.3 billion in the whole of 2010.
The balance of payments refers to the external trade and other financial transactions of one economy with the rest of the world. A BoP surplus means the country receives more foreign exchange than what it pays abroad for its import, debt payments and other financial requirements.
The Bangko Sentral said the BoP surplus amounted to $2.719 billion in August, or more than double the $1.27-billion surplus in July and 30 times the excess of $151 million registered in August last year.
Strong inflows of remittances, merchandise exports, business process outsourcing revenues, tourism receipts and foreign portfolio investments have been supporting the rise in BoP surplus this year and the strengthening of the peso.
Bangko Sentral Governor Amando Tetangco Jr. said the strong balance of payments surplus was also boosting the gross international reserves, which hit $75.6 billion at the end of August, enough to cover nearly a year of imports and payments of services.
Bangko Sentral Deputy Governor Diwa Guinigundo earlier said that “barring any unforeseen event, we expect the BoP to continue to be resilient and the gross international reserves to continue to expand.”
Data showed that foreign portfolio investments, or foreign funds placed in stocks, government securities and money instruments, yielded net inflows of $3.1 billion in the first eight months of the year, or 230 percent more than the $926 million recorded a year earlier.
Remittances from Filipinos overseas, which account for about a tenth of the gross national product in the Philippines, expanded 6.3 percent to $11.4 billion in the first seven months.
Trinh Nguyen, economist for Asia-Pacific of Hongkong and Shanghai Banking Corp., said the solid remittance inflows provided a buffer for the consumption-driven Philippine economy.
Meanwhile, net inflows of foreign direct investments rose 16.4 percent year-on-year in the first half of 2011, as companies placed and retained more investments in the country. FDIs yielded a net inflow of $779 million in the January-June period, up from $669 million registered during the same period in 2010.