BOP surplus hits 2-year high in Feb

MANILA, Philippines - The country’s balance of payments position continued to surge to an almost two-year high in February, the Bangko Sentral ng Pilipinas reported yesterday.

A BOP surplus of $985 million was recorded last month, up 186 percent from the $345 million seen in February last year. This is the highest monthly surplus recorded following the $1.099-billion surplus posted in July 2013.

The BOP is a summary of a country’s transactions with the rest of the world. Components include trade, foreign direct and portfolio investments, and even remittances from Filipinos overseas.

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

The February figure brought the two-month tally to a surplus of $1.121 billion, a reversal of the $4.135-billion deficit in the same period last year.

The BOP posted in a deficit in 2014 after nine consecutive years of being in surplus. Central bank data showed a BOP deficit of $2.879 billion for last year, a turnaround from the $5.085-billion surplus in 2013.

The deficit was blamed to the normalization of policy in the US especially as this resulted in a reallocation of assets among markets and economies.

The US Federal Reserve in January last year started reducing its massive monthly purchases, ending the stimulus in October. Analysts now expect the US central bank to begin increasing rates by the middle of this year.

For this year, the BSP has forecast the BOP to return to a surplus of $1 billion.

BSP Governor Amando M. Tetangco, Jr. earlier this month said the central bank is reviewing assumptions for the BOP position and its components to take into account recent developments in the global front.

Tetangco said these developments include the weaker global economic activity seen this year, the divergence in monetary policy settings among advanced and emerging economies, and the continuous decline in oil prices, among others.

The new set of projections is expected to be completed by next month.