PH economy on solid ground, to weather storm
The Philippines is expected to stay strong despite the recent volatility in financial markets that has sent share prices and the peso crashing as investors fled emerging markets to return to the recovering US economy.
The Bangko Sentral ng Pilipinas (BSP) on Friday said remittances from migrant workers, income from business process outsourcing (BPO) companies, and tourism receipts would support the Philippine economy this year.
The monetary authority’s optimism comes amid weakness in the peso, which breached the 44-to-a-dollar level on Friday, the first time since early 2011.
“Peso developments are motivated by global events. We think the external payments dynamics (of the Philippines) will continue to provide fundamental support to macroeconomic stabilization,” BSP Assistant Governor Cyd Tuano-Amador, head of the central bank’s monetary policy sub-sector.
The BSP on Friday released its revised forecast for various indicators that affect the country’s balance of payments (BOP) position, which is a summary of foreign exchange transactions between the Philippines and the rest of the world.
The central bank sees remittances from overseas Filipino workers growing to $22.5 billion in 2013, up 5 percent from $21.4 billion last year.
Export revenues are also expected to rise 11 percent, made up mainly of coconut, bananas, other agriculture products, and minerals.
This is better than the 12.8-percent dip in export revenues recorded in the first quarter reported by the National Statistics Office, mainly because the central bank did not count “consigned” exports in its count.
Income from the export of consigned products—which are goods such as electronic components that are shipped in and merely assembled in the Philippines and sold abroad—are booked by the BSP under “services.”
These are expected to offset any dip in foreign investments coming into the country, the BSP said.