THE Philippines’ balance of payments (BOP) gained pace in June following the deficits recorded in the previous month and from a year earlier, paving the way to higher cumulative surplus for the first half of the year.
Data released by the Bangko Sentral ng Pilipinas (BSP) on Monday showed a BOP surplus of $485 million in June, reversing the $58 million deficit recorded in May.
The June surplus was also a turnaround from the $24 million deficit posted a year earlier.
“[The] surplus [was]due to foreign exchange deposits of national government from loan proceeds, [and]foreign exchange operations of BSP,” BSP Governor Amando Tetangco Jr. said in a text message to reporters on Monday.
The cumulative surplus for January-June rose to $1.68 billion from a $1.2 billion surplus recorded as of end-May, reversing the $4.14 billion deficit in the same period last year.
The central bank sees the payments balance position at a $2 billion surplus by the end of the year, or a reversal of the $2.88 billion deficit at end-2014.
Sharing the same view is BMI Research, which said that the country’s external position will remain strong despite the expected weak exports this year.
“While Philippine exports will face headwinds from continued weakness in the Japanese economy, we nevertheless expect the country’s current account position to remain strong in 2015,” it stated.
Current account is one of the major component of the BOP. It consists of transactions in goods, services, primary income and secondary income, and measure the net transfer of real resources between the domestic economy and the rest of the world.
The think tank unit of Fitch Group noted that the continued surplus in the services account as well as sustained robust growth in overseas workers’ remittances will support the current account.
“As such, we maintain our forecast for the country’s current account surplus to come in at 4.4 percent of GDP [gross domestic product]in 2015, unchanged from 2014,” it said.
For the first quarter of 2015, current account posted a surplus of $3.3 billion on the back of smaller trade gap, and higher net receipts in the services, primary and secondary income accounts.-