Philippine Economy: The country’s balance of payments (BOP) surplus doubled in the first four months of the year on the back of the robust earnings of the central bank from its investments abroad and foreign exchange operations as well as higher foreign borrowings obtained by the National Government that offset the slowdown in the growth of remittances from overseas Filipino workers (OFWs).
The Bangko Sentral ng Pilipinas (BSP) reported yesterday that the country’s BOP surplus reached $4.577 billion from January to April this year or $2.288 billion higher than the $2.289 billion surplus booked in the same period last year.
The BOP refers to the difference of foreign exchange inflows and outflows on a particular period and represents the country’s transactions with the rest of the world.
For the month of April alone, the BOP surplus climbed seven percent to $1.084 billion from $1.013 billion in the same month last year.
The National Government successfully sold $1.25 billion worth of 25-year peso-denominated bonds due 2036 to global investors last January and another $1.5 billion 15-year global denominated bonds last March as part of efforts to raise funds to bankroll the country’s ballooning budget deficit.
The Philippines borrows heavily from foreign and domestic sources to plug the country’s ballooning budget deficit. The government intends to trim the budget deficit to P300 billion or 3.2 percent of gross domestic product (GDP) this year from the record level of P314.5 billion or 3.7 percent of GDP last year.
The Aquino administration intends to trim the budget deficit to two percent of GDP starting 2013 to 2016.
However, OFW remittances climbed only by 5.9 percent to $4.594 billion in the first quarter of the year from $4.339 billion in the same quarter last year due to tensions in the Middle East and North African (MENA) states as well as the magnitude 8.9 earthquake and tsunami in Japan last March 11.
