RP posts $1.89-B BOP surplus in 5 months

The country posted a balance of payments a surplus of $1.889 billion during the first five months this year, a complete reversal of the $797-million deficit registered over the same period last year.

Bangko Sentral ng Pilipinas (BSP) attributed the turnaround to a 45 percent increase in remittances from overseas Filipino workers.

The BSP said OFW remittances and strong exports contributed to the improvement in the current accounts and the strengthening of the capital and financial account.

According to BSP Governor Rafael Buenaventura, the current account turned in a surplus of $3.182 billion, more than double the $1.498 billion surplus in the same period last year. He said the higher net inflows reduced the net outflows in the services account while the sustained surplus in the goods account contributed to this trend.

"This surplus is basically what has been keeping the peso relatively stable despite the volatility in the global market," said Buenaventura. "Whatever sudden movements we see in the exchange rates won’t last and we’ll stay within the same narrow range."

Total exports for the first five months amounted to $13.425 billion, representing a 3.1-percent increase compared to the amount generated over the same period last year. Buenaventura said the export sector grew by 13.8 percent in May alone, posting a double-digit growth rate for the second consecutive months.

Buenaventura said the upturn in exports was due to sustained increase in the export of machinery and transport equipment, processed food and beverages and sugar.

Specifically, the BSP chief said electronics export continued to rebound, growing by 23.1 percent in May. As a result, the January to May electronics exports grew by 2.2 percent, reversing last year’s contraction.

"There was increased demand from Asian markets particularly Taiwan, China, Korea, Malaysia and Hongkong," Buenaventura said, adding that the exports to these markets compensated for the lower demand from the US and Japan, the country’s traditional export destinations.

Imports, on the other hand, tapered off in May and grew by only 3.9 percent after peaking at 18.8 percent growth in April. Imports for the first five months of the year reached $12.547 billion, up by 3.2 percent from the level a year ago.

Buenaventura said these figures reflect the replenishment and inventory build-up as manufacturers step up importations in anticipation of more robust domestic demand.

The BSP report also indicated that OFW remittances continued to be the main factor behind the two-fold increase in the income account. Net receipts reached $2.526 billion, more than double last year’s level of $1.236 billion.

OFW remittances accounted for about 90 percent of gross income receipts and expanded by 45.3 percent to $3.618 billion during the five-month period, up from only $2.493 billion in the same period last year. The BSP said the increase in remittances came from the 3.8 percent increase in the number of new OFWs deployed abroad.

On the other hand, the BSP recorded that the net outflow of capital and financial account for the period went up to $821 million, up from only $506 million in January to April.

The BSP reported that the net inflows of direct investments amounted to $1.289 billion, slightly lower than the level posted last year due to lower net inflows of inter-company loans and reinvested earnings.