July balance of payments surplus hits 6-month high

The country’s balance of payments (BOP) surplus hit a six-month high of $1.099 billion in July.

Data released by the Bangko Sentral ng Pilipinas (BSP) showed that the July figure was the highest since January, when the BOP surplus reached $2.043 billion.

This was achieved as foreign investors returned to the Philippines after pulling out in droves in June amid widespread aversion to emerging markets in view of the reported tapering of the US Fed’s bond-buying program.

The BOP position is the summary of all transactions between the country and the rest of the world. A surplus in the BOP indicates that more money came into the country than the money that went out during a given period.

The surplus in July was also significantly higher than the June surplus of $692 million.

For January to July, the country’s BOP surplus reached $3.677 billion, lower than the $4.498 billion a year ago.

Latest available data showed that foreign investments in local stocks, bonds and government securities reached a net inflow of $895 million in July, a turnaround from the $23 million outflow recorded the month before.

Another major component contributing to the surplus in the BOP are remittances from overseas Filipino workers, which are expected to reach $22.5 billion this year, up by 5 percent from the 2012 level.

Remittances from OFWs reached $10.7 billion in the first half this year amid sustained demand for skilled Filipino labor, the BSP said earlier this month.

For June alone, remittances reached $1.916 billion, up 5.8 percent year on year.