The country recorded a balance of payments (BoP) surplus last month, the Bangko Sentral ng Pilipinas (BSP) reported on Friday, rebounding from August’s $7-billion deficit.
“The modest BoP surplus derived directly from the BSP’s foreign exchange investment income from abroad but moderated by NG (national government) debt servicing requirements,” central bank Deputy Governor Diwa Guinigundo said.
It was, however, lower than the $117-million surplus recorded a year earlier.
Year to date, the country’s payments balance position stood at a deficit of $1.36 billion, also a reversal from the $1.64-billion surplus posted last year.
A Bank of the Philippine Islands (BPI) analyst said he expected a continuation of small deficits driven largely by huge swings in the trade and current account components of the BoP.
“We expect the trade gap to be more than 7.5 percent of GDP (gross domestic product) and a small surplus of 0.2 percent of GDP at the end of the year,” said Emilio Neri, Jr., BPI vice-president and lead economist.
“This continues to be a sharp contrast to the 3.6 percent of GDP surplus in the current account between 2006 to 2015 and the trade gap of just 3.2 percent of GDP,” he added.
Guinigundo, meanwhile, said the Bangko Sentral continued to expect a modest BoP shortfall for the year “given the good outturn in portfolio investment in August and small overhang in September.”
The BSP, which previously expected a $1-billion surplus, revised its 2017 BOP forecast to a deficit of $500 million in June.
Guinigundo noted that prospects were very encouraging as exports had begun to recover in the last eight months while import growth decelerated.
Exports expanded by 13.3 percent in January to August, faster than the 8.2 percent growth in imports during the same period.
“Cash remittances continue to be robust while BPO (business process outsourcing) revenues have been reported to be resilient at around 10 percent growth,” Guinigundo also said.
Cash remittances, which only count money sent home via banks, totaled $2.49 billion in August, up 7.8 percent year-on-year.
Year-to-date, cash remittances grew by 5.4 percent to $18.59 billion.