BSP considers scaling down BOP forecast

The Bangko Sentral ng Pilipinas is having second thoughts about its forecasts on the country’s balance of payments (BOP) and gross international reserves (GIR) this year and may have to scale down the growth figures due to the prolonged debt crisis in parts of Europe and its impact on the local economy.

“We are mindful of the risks in the external environment, particularly the weakness in the eurozone, tentative growth in the United States, and slowdown in China,” BSP Governor Amando Tetango Jr. said Thursday, hinting at a reduction of BOP and GIR growth projections.

Earlier this year, the central bank said the country’s BOP could hit a surplus of $2.8 billion, while the GIR could set a new record high of $79 billion.

Analysts said the actual figures could be a little less than the central bank’s original forecasts because of the problems abroad.

BOP is a record of the country’s financial transactions with the rest of the world and shows the flow of foreign currencies to and from the country.

Latest data from the central bank showed that the BOP stood at a surplus of $1.45 billion in the first two months of the year—down from last year’s $1.47 billion.

Also, the country’s GIR stood at $76 billion in the first four months of the year.

Exports, foreign portfolio investments, foreign direct investments, and remittances account for bulk of the foreign currency inflows to the Philippines.

Remittances are expected to grow by 5 percent this year, while the rise in foreign direct investments is seen to hold steady. But economists said the figures for exports and foreign portfolio investments could be weaker than expected.

Export growth in 2012 was originally seen at 10 percent. But the latest report from the National Statistics Office showed that exports grew by only 4.6 percent in the first quarter.