PHL posts USD 469M BOP surplus in October ’15

By Joann Santiago

MANILA, Nov. 24 (PNA) — The Philippines continue to post surplus in its balance of payment (BOP) position with the October 2015 level at USD 469 million, higher than the USD 24 million same period last year.

Data released by the Bangko Sentral ng Pilipinas (BSP) Tuesday showed that the surplus last October brought the 10-month BOP position to a USD 2.28 billion surplus, a reversal from year-ago’s USD 3.41 billion deficit.

BSP Governor Amando Tetangco Jr. attributed the surplus in the BOP, which is the sum of a country’s total transactions with the rest of the world, to deposits by the national government and income from the central bank’s investments.

He, however, cited that payments made by the national government for its liabilities partially countered the BOP inflows.

Relatively, the central bank chief is optimistic that the BOP position will not be greatly affected if ever the Federal Reserve announces a hike in December.

He said markets have anticipated the possibility of a Fed rate increase in its last policy meeting this year but admitted that volatilities are still expected.

“In our case, because investors tend to discriminate between economies that are doing very well in macro economic side and others, this would benefit us,” he said citing the country’s sound macroeconomic fundamentals, sustained domestic expansion, low inflation environment, external surplus, sufficient foreign reserves, “a likely better” third quarter output, and robust banking system.

BSP Deputy Governor Diwa Guinigundo is of the same view and noted that a deficit in the country’s BOP position as a result of the Fed liftoff would only because of knee-jerk reaction.

“Hopefully the lift off would not be a critical factor in driving out capital from the EMs (emerging markets),” he said.

Guinigundo, however, pointed out that monetary officials remain confident that “the strong macroeconomic fundamentals can be a good factor for keeping capital in the EMs particularly in the Philippines.”

“There could be some short term volatilities but overtime, it should fade away,” he said.

The central bank has a USD 2 billion BOP surplus target for 2015 and Guinigundo said this remains as they have yet to finish their review of economic targets for the second half of the year.

“In fact we can be positive that BOP will remain in positive territory. Perhaps very close to US$ 2 billion,” he added. (PNA)