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By Maricel E. Burgonio, Reporter
BUOYED by strong remittances by
overseas Filipino workers (OFWs) and foreign investments, the Bangko
Sentral ng Pilipinas (BSP) raised its forecast for the country’s
dollar surplus and dollar hoard this year.
BSP Gov. Amando M. Tetangco Jr.
said the country’s balance of payments (BOP) is likely to post a
$2.9-billion surplus this year, or higher than the central bank’s
earlier forecast of $2 billion.
The BOP captures the country’s
trade, investment and other money flows arising from its economic
transactions with the rest of the world. A surplus means that the
country earned more dollars than it gave up, thus adding to its
dollar hoard or gross international reserves (GIR).
As a result of a higher dollar
surplus, the country’s GIR is also likely to end the year above
the initial forecast of between $25.5 billion and $26 billion. The
BSP set a new forecast of $26.6 billion.
“We’re looking at scenarios
of $2.4 billion to $2.9 billion based on the latest BOP report of
$2.4 billion. The breakdown is being discussed. For GIR, we expect
$26.6 billion,” Tetangco told reporters.
In the first five months of the
year, the country’s BOP surplus reached $2.365 billion, or above
the full-year forecast set by the BSP.
Likely to contribute to the
higher dollar surplus are strong foreign portfolio investments,
which registered a net $1.689 billion at end-May. This is two and
half times more than the $879.27 million seen in the same five-month
period last year.
OFW remittances similarly kept
posting double-digit growth last April, and breached the $1-billion
mark for the 12th month.
The sustained dollar inflows
allowed the GIR to rise by $700 million to $25.8 billion at end-May
from $25.1 billion in the first four months of the year.
A rising reserve level helps
temper consumer price increases, as the rising amount of foreign
exchange boosts the peso’s value, thus pulling down the cost of
imports.
At the Philippine Dealing System,
the peso rose back to the 45-to-a-dollar level on Wednesday after
falling to the 46 level following government report of a widening
budget deficit last May.
The peso closed at 45.90 to the
greenback.
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