THE central bank said its target balance of payments (BOP) surplus of $1.1 billion for this year is still attainable even if the country’s payments position has remained in deficit in the first seven months.
“Financial conditions have settled down since the initial forecasts were generated and our thinking to date is that the $1.1 billion BOP surplus remains attainable,” Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said.
The central bank has slashed by nearly two-thirds its 2014 BOP forecast to a surplus of $1.1 billion from $3 billion previously, citing negative factors such as higher import expectations and lingering global uncertainty.
“Our BOP projection of $1.1 billion was based on data prints [actual and forecasts]as of June 2014,” Tetangco said.
The country’s cumulative BOP position for the first six months of the year remained in negative territory, clocking in at a deficit of $4.14 billion compared with the $2.58 billion surplus recorded in the first half of 2013.
BOP for the month of July 2014 alone was at a surplus of $501 million, swinging back up from a deficit of $24 million in the month of June. But year-to-date levels this year until June remained in net deficit.
While the January to July BOP deficit narrowed to $3.64 billion (due to a surplus for the month of July alone) from a deficit of $4.14 billion in January to June, it was still far from returning to the $3.68 billion surplus level reached in the first seven months of 2013.
Tetangco said the latest BOP forecast is still subject to revision as the central bank regularly reviews its projections twice a year, the first time in May or June and the second review around October or November.
The balance of payments summarizes the country’s economic transactions with the rest of the world over a certain period. It consists of the current account, the capital account, and the financial account.
In 2013, the country recorded a BOP surplus of $5.09 billion, slightly lower than the central bank’s full-year projection of a $5.3 billion surplus.