MANILA, Philippines–The Philippine economy got off to a good start this year with foreign money flowing in as the country made more cash from overseas than it spent on debt payments and imports.
Bangko Sentral ng Pilipinas (BSP) data this week showed the country posted a balance-of-payments (BOP) surplus in January, a turnaround from last year’s record-high deficit.
The BOP position is an accounting of all the business the country made with the rest of the world. Surpluses indicate that more money was made than spent, while deficits mean the opposite.
Authorities this week attributed January’s surplus to higher investments and the sustained resilience of recurring sources of income such as remittances and revenue from certain dollar-earning industries.
In January, the country posted a BOP surplus of $136 million, significantly better than January 2014’s $4.48-billion deficit. However, the surplus in January was lower than December’s $864 million.
“Foreign portfolio investments alone ended January with a net surplus,” BSP Deputy Governor Diwa C. Guinigundo told reporters in a text message yesterday.
Last month, foreign investments in local stocks, bonds and bank deposit certificates rose to a net inflow of $592 million, better than December’s $397 million and the net outflow of $1.8 billion in January 2014. Massive outflows were recorded early last year following jitters over the US Federal Reserve’s plan to start cutting its monetary stimulus for the American economy.
“I would also say that the current account must have continued to be resilient, particularly exports, tourism, business process outsourcing (BPO) revenues and remittances,” Guinigundo said.
Apart from these revenues, export sales and proceeds from foreign obligations are also counted as inflows in the BOP.
Meanwhile, the country spends on the importation of goods such as food and fuel as well as for foreign debt payments. Divestments made by foreign investors are also counted as outflows.
For all of 2015, the BSP expects the economy to end the year with a BOP surplus of $1 billion.