BOP posts $2.62-B surplus in 2015

MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) reported yesterday the country’s balance of payments (BOP) position booked a surplus of $2.62 billion in 2015, exceeding the full-year target of $2 billion.

Last year’s surplus was a complete reversal of the $2.86 billion deficit recorded in 2014.

The BOP shows 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 abroad.

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

The surplus last year came from the deposits of the national government of the proceeds from foreign loans and income from investments of BSP assets.

On the other side of the equation, outflows resulted from the payment of national government debt that partially offset the total inflows.

As early as October, the country’s BOP surplus surpassed the full-year $2 billion target despite the weak global demand, as well as the volatility in global financial markets.

The US Fed is expected to further raise interest rates this year after raising its near-zero rates by 25 basis points for the first time in nearly a decade last Dec. 17.

This year, the BSP is looking at a higher BOP surplus on the back of the country’s improving trade.

Zeno Ronald Abenoja, director of the BSP’s Department of Economic Research, earlier said the surplus in the BOP is seen hitting $2.2 billion or 0.7 percent of gross domestic product (GDP) this year.

Abenoja said the central bank is looking at a lower current account surplus of $5.7 billion or 1.7 percent of GDP this year from the revised $8.9 billion in 2015.

The revision in the figures, he explained, was caused by the downward revision in the global growth outlook for 2016 but higher than in 2015.

According to Abenoja, the BSP also considered the increase in international oil prices as well as the easing volatility in global financial market after the US Fed raised interest rates last month.

He also cited the continued favorable growth prospects for the domestic economy.