The country’s balance of payments (BOP) surplus jumped 174 percent in the first quarter of the year due to robust earnings of the central bank from its investments abroad and foreign exchange operations, remittances from overseas Filipino workers (OFWs) as well as the higher foreign borrowings obtained by the National Government, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.
Data released by the central bank showed that the country’s BOP surplus reached $3.493 billion from January to March this year or $2.217 billion higher than the $1.276-billion surplus booked in the same period last year.
The BOP refers to the difference between foreign exchange inflows and outflows on a particular period and represents the country’s transactions with the rest of the world. A surplus means the inflows are bigger than the outflows.
The BSP’s Monetary Board sees the country’s BOP surplus reaching $6.7 billion this year. The country’s BOP surplus surged 124.3 percent to hit a new record level of $14.4 billion last year from $6.42 billion in 2009 due mainly to a lower than anticipated merchandise trade deficit wherein actual exports grew larger than forecast coupled with higher-than-projected OFW remittances.
The National Government successfully sold $1.25 billion worth of 25-year peso-denominated bonds to global investors last January and another $1.5 billion in 15-year bonds last March as part of efforts to raise funds to bankroll the country’s ballooning budget deficit.
As a result, the Philippines booked a BOP surplus of $2.02 billion in March or about 12 times the $1.69 million surplus recorded in the same month last year. This was also a complete reversal of the $133-million BOP deficit recorded in February.
The Aquino administration intends to trim the budget deficit to 2.0 percent of gross domestic product (GDP) starting 2013. The Philippines borrows heavily from foreign and domestic creditors to rein in the country’s widening budget shortfall.
The country’s budget shortfall widened to a new record level of P314.5 billion or 3.7 percent of GDP last year from P298.5 billion or 3.9 percent of GDP in 2009 due to the full impact of the global financial crisis.
The government hopes to trim the deficit to P300 billion or 3.2 percent of GDP this year.
