10-month BOP surplus hits $9.93B

The Philippines posted a balance-of-payments surplus of $9.93 billion in the 10 months to October, supported by inflows from portfolio investments, exports and remittances, the Bangko Sentral ng Pilipinas reported Friday.

The BOP surplus in the first 10 months was up 8 percent from $9.18 billion in the same period last year.

But for the month of October, the BOP, the difference between foreign exchange inflows and outflows, stood at a surplus of $208 million, down 92 percent from $2.74 billion in the same month last year.

The decline was blamed largely on the debt crisis in the euro zone that dampened the outlook among portfolio fund owners on the global economy. Economists said the negative sentiment on the international front was the reason investors cashed in on their securities investments, mostly in the form of stocks and bonds from emerging markets like the Philippines.

Earlier, the central bank said it was reviewing its current 2011 balance-of-payments surplus forecast of $6.7 billion and might revise it upwards after the figure was exceeded starting August.

The Philippines posted a record BOP surplus of $14.3 billion in 2010, boosted by strong portfolio inflows.

Net portfolio inflows in the 10 months to October reached $3.44 billion compared with last year’s $2.51 billion.

The Bangko Sentral has said that it might keep its 7-percent remittance growth forecast for the year despite the slowing US economy and euro zone’s debt problems.

Remittances from overseas Filipinos remained strong despite economic problems in the United States and the euro zone because of the rising demand for labor in alternative labor markets.

The Bangko Sentral said that the country’s external liquidity remained within comfortable levels despite the decline in the BOP surplus in October.

The $9.93-billion surplus in the first 10 months was actually higher than the original full-year forecast of $6.7 billion.

The Bangko Sentral said the surplus was expected to remain well above $6.7 billion until the end of the year as inflows mainly from remittances were expected to continue surpassing the outflows.

A surplus in the BOP adds to the country’s total reserves of foreign currencies, or the gross international reserves (GIR).

The GIR stood at $75.8 billion as of the end of October and was seen to reach a new record high of at least $76 billion by the end of the year. With a report from Reuters