The surplus in the country’s balance of payments (BOP) surged by nearly five times in November from a year ago, as optimism on the economy drove up investment inflows.
Officials said the country became a preferred site for securities investments due to the robust growth of the Philippine economy amid a weak external environment.
The Bangko Sentral ng Pilipinas on Wednesday reported that the BOP surplus amounted to $2.16 billion during the month, higher than the $364 million reported in the same month of 2011.
This brought the cumulative surplus for the first 11 months of the year to $8.6 billion, which was, however, down by 16 percent from the $10.18 billion registered in the same period last year.
BOP is a record of the country’s commercial transactions with the rest of the world. It indicates the flow of dollars and other foreign currencies to and from the country. A surplus means that the inflows have exceeded the outbound currencies.
A surplus in the BOP adds to the country’s total reserves of foreign exchange reserves, or gross international reserves (GIR).
Earlier, the central bank reported that the country’s GIR amounted to a historic high of $84.1 billion by the end of November.
BSP Governor Amando Tetangco Jr. told reporters that a key driver of the surplus in November was the strong inflows of foreign portfolio investments.
So far this year, the Philippines has become one of the fastest-growing economies in Asia. In the first three quarters, it grew by 6.5 percent from a year ago. As a result, the economy would likely exceed its growth target of 5 to 6 percent for this year.
The Philippines’ robust growth rate, at a time the eurozone is in the grip of a crisis while the US economy continues to plod on, recently caught the attention of credit-rating firms.
The Philippines is now rated just a notch below investment grade by all three international credit watchdogs—Fitch Ratings, Moody’s Investors Service, and Standard & Poor’s.
Government officials thus expect the Philippines to get an investment rating by next year.
Tetangco also said proceeds of loans denominated in foreign currencies, as well as the central bank’s own earnings from its investments, fueled the rise in the BOP.