’15 dollar flows swing to surplus

The Philippines ended 2015 with more dollar inflows than outflows, exceeding the government’s balance-of-payments (BOP) position target for the year.

Bangko Sentral ng Pilipinas (BSP) data released Tuesday showed that a BOP surplus of $2.616 billion was posted as of the end of 2015.

In December, the country posted a six-month high surplus of $481 million, reversing the $141-million deficit in November.

The yearend figure surpassed the $2-billion target for 2015.

In 2014, the BOP swung to a deficit of $2.9 billion, the first annual deficit in a decade as well as largest on record, largely attributed to the normalization of monetary policy in the US at that time.

The BOP represents the financial summary of all the business the country does with the rest of the world.

The end-2015 surplus meant that the amount of dollars that entered the economy during the year was more than the money that left the country.

The BSP had projected the BOP surplus to further rise to $2.2 billion this year and result into an increase in the gross international reserves (GIR) to $82.7 billion, equivalent to nine months of import cover.

The country’s GIR settled at $80.6 billion at end-2015, higher month-on-month and year-on-year but lower than the government target of $81.6 billion.

Sources of income for the country include remittances from overseas Filipino workers, income from exports of goods and services, foreign investments and revenues from certain industries such as tourism and business process outsourcing.

In the meantime, the country uses the dollars it earns for the importation of goods, such as food and fuel, and the payment of foreign debt. Divestments made by foreign investors are also counted as outflows.

BOP data is tracked closely to ensure that the supply of dollars in the economy remains ample enough to allow businesses and the government to transact with the rest of the world. Ben O. de Vera