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By Maricel E. Burgonio, Reporter
STRONG overseas Filipino worker (OFW)
remittances and foreign investments in the local stock market and
other peso-denominated financial assets allowed the country to
exceed the Bangko Sentral ng Pilipinas’ (BSP) dollar surplus
forecast for this year seven months ahead of schedule.
BSP Governor Amando M. Tetangco
Jr. said the country’s balance of payments (BOP) surplus reached
$2.365 billion at end-May, surpassing the central bank’s forecast
of a full-year $2-billion surplus as well as last year’s
five-month surplus of $1.808 billion.
In May alone, the country’s BOP
surplus this year reached $665 million. This is a reversal from the
$36-million deficit recorded in the same month last year.
The BOP summarizes the
country’s economic transactions with the rest of the world, to
include its trade, investments and other income transfers. A surplus
is viewed in a positive light since this means that the country
earned more foreign exchange than it gave up.
Earlier, Tetangco said the
country is likely to exceed the BSP’s forecast, citing higher OFW
remittances and foreign investments. Last year, the country’s BOP
surplus reached $3.769 billion.
“The January to May [period]
showed a surplus of $2.4 billion which arose from double-digit
growth in remittances, sustained investment inflows, growing
exports, frontloading of national government borrowings, and
investment income,” Tetangco told reporters.
OFW money usually flood the
country between April and June, as Filipinos abroad send home more
money for the educational expenses of loved ones.
Based on the BSP’s most recent
data, OFW money grew 26.1 percent year on year to $4.7 billion in
the first four months of the year. Meanwhile, net foreign portfolio
investments amounted to $1.689 billion at end-May, or two and half
times more than the $879.27 million seen in the same period last
year.
Record dollar inflows have kept
the peso rising, breaking into the 45-to-a-dollar level again on
Monday despite intervention by the BSP.
At the Philippine Dealing System,
the peso closed at 45.920, stronger than Friday’s close of 46.8
against the greenback. The local currency opened at 46.080 and
traded to a low of 46.100 and a high of 45.95. Total volume turnover
reached $561.5 million.
“The BSP has intervened in
yesterday’s trading [to] slow down the appreciation of [the] peso
but did not prevent [the] peso from breaking [to the] 46 level,” a
trader said. Another trader said the central bank was responsible
for less than $100 million of trading volume.
Traders said the overnight
appreciation of Asian currencies supported the appreciation of the
Philippine unit. “We’re seeing foreign portfolio investments,”
a trader said.
The peso is seen to trade between
45.60 and 46.30 this week.
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