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BOP surplus surged in November

Balance of payments stands at $2.16B


The surplus in the country’s balance of payments surged by nearly five times in November from a year ago, as optimism on the economy drove up investment inflows. AP FILE PHOTO

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.

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Tags: balance of payments , BOP surplus , Philippines

  • muddygoose

    Clean up the bureaucracy so we get more FDIs please.

    • 12JEM

       Amend the economic provisions of the 1987 constitution. Otherwise FDI will not be forthcoming.

  • http://profile.yahoo.com/2I5Z6CAZKOTTPZEHG4LFXYUFFA dudes

    Dapat ipautang yan sa world bank at IMF para may interest para balance sa inutang natin yung interest jan yung na lang ang ibayad sa mga utang natin…..

  • http://www.facebook.com/flowsotelo Florenz Ryan Sotelo

    I wish reports like this be made in context with what is happening in the Asian region. Yung after na ma-discuss bakit nagkaroon ng BOP, i-report din anu naman ang nangyayari sa BOP ng iba pang south east asian countries. This will give us a better understanding and appreciation of what’s really happening with our economy.

    • lucidlynx

      Bakit? It’s not gonna change the situation regardless of what’s happening in other countries. 

      Your suggestion is only appropriate for foreign investors so that they can decide better where to pool their limited funds for investment prospects. But internally, the government and the people of the Philippines would just be mainly concerned on the country’s economic performance.

  • Hayek_sa_Maynila

    It is obvious that “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.” are not sustainable sources of foreign currencies. In fact, its an indication that we are becoming more dependent on foreign currency leveraging again.

    This is most likely due to the one-way bet signal that the USD/PHP market exhibits combined with the still wide interest differential b/w PHL rates and those of the US Fed, ECB and many others.

    We should be worried, therefore and not prematurely celebrate if this is the case as our economy is expanding but becoming more vulnerable to financial instability.

    • lucidlynx

      Anong pinagsasabi mo? Those foreign currencies are the payments coming into the country in exchange of what we sell (exports) to the world. The main source of income is our exports.

      Why would money come into the country without the source of the money having gained nothing in return?

      The increase in BOP is that we had more to sell (thus have more money coming in), than having us to import more (more money going out).

      • Hayek_sa_Maynila

        Ano ang pinagtatanong mo? Hindi mo yata binasa ang article.

        Hindi lang po export at import ang kasama sa balance of payments. Kasama po dyan ang lahat ng uri ng transaction sa pagitan ng Pilipinas at dahuyang bansa kasama ang pinapa utang sa atin at ang pina uutang natin sa mga dahuyan.

        To answer your question “Why would money…?” the answer is money can come into the country even if they are not earned. These are borrowings of locals from foreign institutions or foreign investors buying “assets” or “equity” in the PHL. Please open you International Economics textbook to read more about BoP.

        Ang sabi ng governor karamihan ng pumasok na dolyar sa abroad ay perang inutang ng mga pinoy na kumpanya sa mga dayuhang bangko. Dapat ba nating ikasaya yan o ikatakot yan? Dapat bang lumakas ang piso dahil naka utang tayo? Parang corporasyon yan na nagtaas ng sweldo ng mga empleyado nya dahil nakahiram ng pera sa bangko. Bansa ng nagpapalakas ng kanyang currency (piso) dahil nakahiram ng pera sa mga bangko abroad.

    • ofwme2807

      hello not susutainable??go research @ BSP that the Philippines for the last more than 5 years now or more have registered BOP surpluses in billions of US dollars..our foreign exchange reserves have been rising due to the surplus dollars which the BSP have purchased to smoothen the volatilitiy and temper rise of the peso…our foreign reserves have now exceeded our total foreign debt I think more than 2 years ago..theoretically if the Philippines pays all our outstanding foreign debt right now of about 62.5B USD, the BSP will still end up with more than 20B USD and the Philippines becomes foreign debt free???and the yearly remittances will continue and would be sustained as a result of continuous employment abroad and proceeds from IT-BPO, tourism receipts, merchandise and services exports and foreign hot money and FDI’s…

      • Hayek_sa_Maynila

        “loans denominated in foreign currencies” are liabilities. if your BOP is growing because of liabilities rather than earnings then it is not sustainable. Get it? Ang sabi ng governor ay bulk ito ng inflows.

        Parang kumpanya lang yan na maraming cash dahil nakahiram ng pera sa bangko…sustainable ba yun? ang sustinable na cash ay yung kinita dahil sa negosyo, hindi yung cash na pinahiram ng kung sino, na babawain din pag dating ng panahon…Ayus ba? Malinaw na ba?

        ikaw itong mag research! Hindi naman sa pagyayabang pero sa pagkaka-alam ko ako ang unang tao na nagpaalam sa BSP nyang net creditor (more dollar assets than dollar liabilities) status ng Pilipinas noong 2009. pero maglalaho ng mabilis yan pag puro portfolio flows ang dahilan ng paglakas ng piso. Hindi fundamentally driven yan. Speculation driven po yan.

        There is no guarantee that yearly remittance growth, BPI, tourism receipts, exports will continue specially if peso continues to appreciate..specially if PHP appreciation is one of the fastest in the region whereas the likes of Indonesia is gaining competitveness with the Rupiah’s depreciation.

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