MANILA, Philippines—The country’s balance of payments (BOP) ended in a deficit in February as outflow of foreign currencies, largely accounted for by payments by the government of its dollar-denominated debts, exceeded the inflows.
Documents from the Bangko Sentral ng Pilipinas showed that the BOP deficit amounted to $133 million in February, 6.4 percent more than the deficit of $125 million registered in the same month last year.
“The February [BOP] deficit was due largely to payments of maturing foreign exchange obligations by the national government,” BSP Governor Amando Tetangco Jr. told reporters on Friday.
Bounce back
He said the BOP position would likely bounce back and stay in the positive territory in the months ahead as succeeding maturing obligations for the year were less than those in February.
“This [BOP deficit in February] was not enough to reverse the trend as the cumulative position for the first two months of 2011 was still at a surplus of $1.47 billion,” the central bank chief pointed out.
The $1.47-billion surplus in the first two months was higher by 32 percent than the $1.11-billion surplus registered in the same period last year.
Tetangco said the BSP still expected the BOP to be in a surplus for the entire 2011. He said remittances and foreign portfolio investments were expected to drive the inflow of dollars and other foreign currencies into the country this year.
Closely watched
The BOP is a closely watched economic indicator. A surplus in the BOP adds to the country’s total reserves of currencies, or the gross international reserves (GIR), which determine its abil ity to pay external debts, pay for imported goods and services and to engage in other commercial transactions with the rest of the world.
Latest documents from the central bank showed that the GIR stood at $63.95 billion at the end of February, an all-time high.
The country’s growing reserves of foreign currencies were cited by credit-rating agencies in upgrading their views on the Philippines’ credit standing. They said the rising amount of GIR was improving the country’s ability to service its foreign currency-denominated liabilities.
In November, Standard & Poor’s raised the country’s credit-rating from three to two notches below investments grade.
In January, Moody’s Investors Service adjusted its credit outlook on the country from “stable” to “positive.” A stable outlook indicated the probability of an upgrade in credit-rating within a year. The Philippines’ credit-rating with Moody’s is three notches below investment grade.