Eurozone woes cut BOP surplus in JuneBy Ronnel W. Domingo
Philippine Daily Inquirer
The country’s balance of payments (BOP) surplus dropped to $14 million in June, bringing the first-semester surplus to $1.316 billion, according to the Bangko Sentral ng Pilipinas.
BSP data showed that the BOP remained positive after recovering to $138 million in May following two months of deficit.
However, foreign currency net inflows in June was just 6 percent of the $222 million recorded in the same month of 2011.
Also, the latest figure meant that the BOP for the first semester was just about a quarter of the $5.016-billion surplus attained in the same period last year.
Central bank officials attribute the surplus largely to the BSP’s income from its investments in foreign currency-denominated securities which are mainly US treasuries, as well as proceeds from its foreign exchange trading.
The BOP is a closely watched economic indicator because it shows a country’s level of foreign exchange liquidity, which is necessary to engage in commercial transactions with the rest of the world.
Factors that help boost the country’s BOP include foreign investments, income from exports, remittances sent by overseas Filipinos, and foreign currency-denominated loans extended to the government and income by the BSP from its investments abroad.
Earlier this week, the BSP released data that show that remittances from overseas Filipinos coursed through banks reached $1.8 billion in May, 5.1 percent higher year on year.
This brought the cumulative remittances in the first five months to $8.3 billion, an increase of 5.3 percent over the same period last year.
A surplus in the BOP builds up the country’s stock of foreign exchange or gross international reserves (GIR), which has reached $76.3 billion as of June.
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