Dollar deposits, trading gains hike BOP surplus

MANILA, Philippines - The Philippines’ balance of payments (BOP) rose for the first four months this year, indicating the country’s good financial health. During the period, the country’s BOP – the remaining difference after imports are subtracted from exports, including financial flows – increased, posting a $2.198 billion surplus. The figure, which is 2.7 percent higher than last year’s $2.14 billion, raised the possibility that this year’s BOP surplus may reach $700 million, more than eight times larger than the $89 million posted last year. The BOP surplus rose, thanks to trading profits earned by the central bank’s foreign exchange operations as well as dollar deposits of the national government and various privately-owned banks, the Bangko Sentral ng Pilipinas (BSP) said. The surplus was also brought about by BSP’s income from foreign investments, BSP Governor Amando M. Tetangco Jr. said in a text message. “These inflows were partly offset by foreign debt servicing by the national government," he added. Foreign fund managers have begun to consider emerging markets such as the Philippines again as their risk appetites increased on signs that the worst may be over for global slowdown, Tetangco told reporters. The Philippines has attracted foreign funds anew, leading to an “uptrend in the strength of the peso," he said. The BOP features a current account component, which keeps track of the net flow of trade in goods and services. Meanwhile, another separate component called the capital account monitors the net flow of investments. , which keeps tab of all economic transactions between the Philippines with the rest of the world, keeps a record of the net flow of trade in goods and services under the current account component and a separate record of the net flow of investments under the capital account. Economists have said that a BOP surplus or deficit is neither good nor bad since the more urgent consideration is the overall stability of the economy. - GMANews.TV