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.