THE Bangko Sentral ng Pilipinas (BSP) remains confident that balance of payments (BOP), which reflects the country’s transactions with the rest of the world, will revert to a surplus from the deficit state that the aggregate is at the moment.
BSP Governor Amando M. Tetangco Jr. said the forecast surplus of $1.1 billion in the BOP “remains attainable.”
“Financial conditions have settled down since the initial forecasts were generated, and our thinking to date is that the $1.1-billion BOP surplus remains attainable,” the central bank governor said.
Latest data show the BOP as a deficit of $3.64 billion in the first seven months of the year.
This means the foreign-currency earnings of the country proved insufficient to cover the foreign-currency expenses that had to be made during the period. In its mid-year assessment of the various government economic assumptions, the Development Budget Coordination Committee (DBCC) said the BOP was seen as a surplus totaling $1.1 billion. This means that for the economy to achieve the forecast surplus, the Philippines must regularly report a surplus in the final five months of the year.
In July this year, the BOP stood as a surplus of $501 million. This was the largest foreign-currency excess for the country since November 2013.
While the central bank governor remained optimistic of the BOP surplus as still attainable, Tetangco reiterated the forecast remains subject to review and possible revision before the end of the year.
“We regularly review our projections twice a year: the first time in May/June and the second time in October/November,” he said.
The BOP consists of the current account, or the transactions in goods, services and income; the capital account, or the capital transfers of nonfinancial assets; and the financial account, or the transactions that involve financial asset, such as stocks and derivatives.