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By Maricel E. Burgonio, Reporter
The Bangko Sentral ng Pilipinas (BSP)
said it would be advantageous for the country to post a lower
balance of payments (BOP) surplus this year to avoid the fast
appreciation of the peso.
The BOP summarizes the
country’s economic transactions with the rest of the world to
include trade, investments, and other income transfers. A surplus is
viewed in a positive light since this means the country is earning
more dollars, which helps strengthen the peso and slow down
inflation.
“Our view is already captured
by our projection of a lower surplus from $3.8 [billion last year]
to $2.9 [billion this year] because there are more repayments by
both government and the private sector,” BSP Deputy Governor Diwa
C. Guinigundo said.
“It will be desirable if we see
BOP that will reflect [the] robustness of [the] peso and overseas
Filipino [worker] remittances. We want to see residents investing
foreign assets,” he said.
The BSP earlier raised its BOP
surplus forecast from $2 billion to a range of between $2.4 billion
and $2.9 billion this year.
In April 2, the central bank also
began implementing a package of reforms in the foreign-exchange
market.
Specifically, the BSP set limits
on overbought and oversold positions of banks, on the allowable
outward investments by residents, and the allowable foreign-exchange
purchases by residents.
Guinigundo said the BSP plans to
implement the second wave of forex reforms this year. “We hope to
be able to finish it and announce it within the year,” he noted.
In line with the new forex rules,
the International Monetary Fund (IMF) has set guidelines on exchange
rate surveillance to make it easier to determine whether the country
is manipulating its currency.
“While it is useful to expand
the scope of exchange rate surveillance it might be too presumptuous
to talk about the required internal policy to ensure alignment of
currencies,” Guinigundo said.
He said different countries have
varying ways of handling their foreign exchange levels. “So its
difficult if the surveillance would be very presumptuous it’s like
telling countries what to change or what to do,” he said.
BSP Governor Amando M. Tetangco
Jr. earlier said the peso’s exchange rate is market determined but
the central bank is ready to act if there are sharp movements.
The peso has risen to a
six-and-a-half year high against the dollar, breaching the
45-to-a-dollar level since April.
The Development and Budget
Coordinating Committee is expected to upgrade its peso forecast this
year to P47 to P48 against a dollar from the current forecast of P48
to P50.
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