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By Maricel E. Burgonio, Reporter
THE Philippines incurred its first dollar
deficit in June, after six months of enjoying surpluses, according
to the Bangko Sentral ng Pilipinas (BSP).
BSP Governor Amando Tetangco Jr. said the
country’s balance of payments (BOP) registered a deficit of $248
million last month, cutting the first-half surplus to $1.934 billion
from $2.182 billion at end-May.
The BOP summarizes the country’s economic
transactions with the rest of the world, including external trade,
investments, borrowings, and other income transfers. A surplus
indicates the country is earning more dollars than it is giving up,
and a deficit the reverse. Sustained deficits eat up into the
country’s dollar reserves, the erosion of which would pull down
the peso’s value vis-a-vis the dollar and cause higher inflation.
“The BOP deficit of $248 million in June was
attributed mainly to outflows arising from the loan prepayments,
debt service payments by the national government and the BSP and
portfolio investments,” Tetangco said.
“This [six-month] surplus was achieved on
account of continued foreign exchange inflows from overseas Filipino
remittances, merchandise exports, foreign direct investments and
investment income from BSP,” he said.
State-run Power Sector Assets and Liabilities
Management Corp. has made $258 million in prepayments in June while
the government’s debt servicing reached $213 million.
Foreign portfolio investments, which is money
invested in Philippine stocks and other peso-denominated financial
assets, registered a net outflow of $411 million in June compared
with a net inflow of $2.552 billion in the same month last year. The
BSP had blamed the outflows on growing risk aversion, as foreign
investors avoided emerging markets like the Philippines in light of
high inflation and a global economic slowdown.
The central bank expects net foreign portfolio
investments to reach $1.1 billion this year, lower than the $3.5
billion last year due to risk aversion and high oil prices.
The BSP said it also registered an income of $51
million from its investment abroad last month.
Due to the global uncertainty brought about by
the US sub prime mortgage crisis, the BSP cut its full-year surplus
forecast to $2.5 billion this year from its earlier projection of
$3.4 billion. Last year, the country enjoyed an $8.6-billion
surplus.
The BSP said this year’s BOP surplus would be
supported largely by remittances from overseas Filipino workers.
Remittances sent home by Filipinos abroad are projected to hit $16.4
billion this year from $14.4 billion last year due to the steady
growth of deployed workers.
Export receipts however are seen easing due to
the slowdown in the Philippines’ biggest market, the US. Along
with record prices of imported commodities like oil and rice, the
central bank also forecast a wider trade deficit for this year.
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