The Bangko Sentral ng Pilipinas has slashed its balance-of-payments (BOP) surplus projection for the year to $500 million even as monetary authorities expected it to double next year amid expectations of a global economic recovery.
The BSP lowered from the $2-billion BOP surplus it projected last May the expected yearend figure as the double-digit growth in imports to date outpaced an expected drop in end-2016 exports that would pull the current account lower to $2.5 billion, down from the previous projection of $5.8 billion.
The BOP is a summary of all the businesses the country does with the rest of the world. A surplus means the amount of dollars that entered the economy that year was more than the amount that left.
The BSP sees imports expanding 11 percent by yearend while exports would likely decline by 3 percent.
BSP Deputy Governor Diwa C. Guinigundo nonetheless said that despite the widening trade deficit due to rising im ports, there was no need to worry about a shrinking current account.
“Imports of capital goods are prominent in the structure of our imports. Capital goods, power generating and electrical machinery are necessary to sustain economic growth,” Guinigundo pointed out.
Also, while merchandise exports are weak, Guinigundo noted that services such as business process outsourcing were providing support.