The country’s balance of payments (BOP) remained in a surplus for 2013 but missed the full-year target of the Bangko Sentral ng Pilipinas (BSP).
Data from the BSP showed that the country’s BOP recorded a surplus of $5.089 billion for January to December 2013, falling short of the $5.3-billion revised target of the central bank for the year.
The full-year (FY) BOP surplus was also lower compared to the $9.236 billion recorded in 2012. In December alone, surplus was at $419 million, lower compared to the $837-million surplus recorded in November.
“The strength of the country’s external payments position continues to be manifested in the BOP surplus of $5.1 billion for FY 2013. While slightly lower than the projected surplus of $5.3 billion [announced in December], this was higher than the earlier projection of $4.4 billion [developed in May and announced in June],” BSP Governor Amando Tetangco Jr. said in a text message on Monday.
Tetangco added that uncertainties about global economic developments, including the phasing of the withdrawal of monetary policy accommodation in the developed/mature economies, have accentuated external risks to the BOP outlook. This year, the BSP projects that the BOP will remain in surplus at $3 billion, or 0.9 percent of the country’s gross domestic product.
“It, however, bears pointing out that the BOP surplus continues to draw support from fundamentally driven FX [foreign exchange]flows, such as those in the current account that remains in surplus, from which the economy can build resilience against external headwinds,” the BSP governor said.
“The sustainability of the external payments surplus continues to be a real feat given ongoing vulnerabilities/challenges in the global economy,” he added.
Meanwhile, Jeff Ng, economist at Standard Chartered Bank, said in an email that while the BOP surplus missed the BSP target, it is still positive in terms of respectable performances from the current account and financial account.
“We expect the current account surplus to reach 4.3 percent in 2013, up from 2.8 percent, as remittances and export growth improve in H2 [second half]compared to H1 [first half],” Ng said.
Ng also noted that the financial account likely dragged as a result of outflows triggered by the uncertainty over the tapering of the bond-buying program of the United States Federal Reserve.
The BOP summarizes the country’s economic transactions with the rest of the world during a period. It consists of the current account, the capital account, and the financial account. A surplus arises when inflows are greater than outflows, while a deficit is incurred when outflows of dollars exceed the inflows.