BOP swings to surplus

MANILA, Philippines - The country’s balance of payments position posted a surplus in July, a turnaround from a deficit in the previous month, the Bangko Sentral ng Pilipinas reported yesterday.

The BOP surplus amounted to $501 million in July, 54 percent lower than  the $1.099 billion recorded in the same month last year but a  turnaround from the $24-million deficit seen in June this year.   

BSP Gov. Amando M. Tetangco, Jr. told reporters the surplus was  driven by the national government’s foreign exchange deposits with the  central bank and income from the BSP’s foreign exchange operations and  investments abroad.   

The BOP is a summary of a country’s transactions with the rest of the  world. This is made up of trade, foreign direct and portfolio  investments, and even remittances from Filipinos abroad.   

A surplus means more money went into the economy during the period, while a deficit means otherwise.   

In the seven months to July, the country saw a BOP deficit of $3.643  billion, a reversal of the $3.677-billion surplus in the same period  in 2013.   

This was primarily due to a $4.480-billion deficit recorded in the month of January alone amid heightened volatility in global financial  markets.   

January marked the start of the US Federal Reserve’s reduction in its  massive monthly purchases, which is now seen ending in October.   

Speculation on the start of the tapering and the actual scaling down  of stimulus prompted capital outflows from emerging markets including  the Philippines as investors rebalanced their portfolios.   

The central bank expects the BOP position to settle at a surplus of  $1.1 billion by year-end, 78 percent below the $5.085 billion recorded in 2013.