Bangko Sentral lowers 2014 surplus projections on payments position, current account

Bangko Sentral ng Pilipinas has lowered surplus projections for the current account and balance of payments (BOP) this year, citing higher demand from electronic manufacturers and the reconstruction of areas devastated by Typhoon Yolanda, the central bank chief said Friday.

 

The current account surplus is expected to reach $6 billion while the BOP surplus will settle at $1.1 billion at end-2014, Governor Amando Tetangco Jr. told reporters in a briefing.

 

Last year, the payments surplus totaled $5.085 billion last year, slightly narrower than the $5.3 billion target.

 

The revised forecasts compare with the original projections of $11.1 billion current account surplus and $5.3 billion payments surplus earlier this year.

 

The central sees a higher demand for imports from domestic companies that, coupled with slower export receipts, will result in a wider trade deficit, Tetangco said.

 

"Growth rate of exports is maintained at 6 percent, but because of lower base, absolute number is $47.4 billion," he said.

 

"Imports growth rate (forecast) is increased to 9 percent because of requirements of domestic companies, particularly in electronics and other tech manufacturers and reconstruction efforts," Tetangco added.

 

Typhoon Yolanda, the strongest to hit land on record, barreled through Central Philippines on Nov. 8, 2013, flattening towns and cities, and killing at least 6,200 people.

 

The current account is a component of the BOP, which measures a nation’s transactions with the rest of the world.

 

The central bank chief, meanwhile, said gross international reserves are forecast to rise to $85.3 billion by the end of 2014, lower than the earlier forecast of $88 billion.

 

The figure was higher than the $83.749 billion as of end-2013.

 

"Bottom line is external sector continues to be strong. The current account is expected to remain in surplus and there's improvement in capital account despite developments overseas," Tetangco said. – VS, GMA News