Payments surplus lifts intl reserves to new record – Bangko Sentral

The Philippines balance of payments surplus boosted its foreign-exchange reserves to reach a record level in 2012, the Bangko Sentral ng Pilipinas chief said Friday.  

 

In an interview with reporters at the sidelines of the Bankers' Night, Governor Amando Tetangco Jr. said the BOP surplus amounted to $9.24 billion last year. This,  however, was narrower than the $10.18 billion in 2011.

 

The surplus boosted the country’s gross international reserves (GIR) to grow by 11 percent to a revised $83.8 billion, still a historic high. 

 

The latest figures were updates to earlier estimates of an $8.9-billion BOP surplus and an $84.2-billion GIR the Bangko Sentral release earlier this month. 

 

A payments surplus indicates the inflow of foreign currencies to the country exceeds the outflow, and leads to a buildup in the GIR or the total reserves of foreign exchange. 

 

The GIR serves as a cushion to external shocks, and reflects a country’s ability to pay for imports, debts to foreign creditors, and to engage in other commercial transactions with the rest of the world.

 

The significant inflow of foreign exchange last year was driven by remittances from overseas Filipinos, foreign portfolio investments or hot money, and foreign investments in the business process outsourcing sector. 

 

Last year's reserves were enough to cover 12 months worth of imports and is six times the outstanding short-term debts to foreign creditors.  

 

Tetangco said the level of foreign-exchange liquidity helps the Philippines deal with global economic uncertainties in a resilient manner. “The country’s external position remains healthy and this helps the economy withstand potential external shocks.” — SOA/VS, GMA News