BOP bulks up to $854-M surplus in March

The Philippines posted its biggest balance of payments ( BOP) surplus in over a year in March amid strong inflows from foreign direct investment (FDI) and cash remittances from Filipinos abroad. Data released by the Bangko Sentral ng Pilipinas (BSP) yesterday showed the country booked a BOP surplus of $854 million in March, a complete reversal of the $ 244 million deficit registered in the same month last year.

Last month’s BOP surplus was the highest since the $985 million surplus recorded in February last year.

The Philippines experienced a BOP deficit of $813 million in January and $316 million in February as more financial resources left the country due to the volatile global financial markets early this year.

For the first three months, the country booked a BOP deficit of $275 million, a complete reversal of the $ 877 million surplus registered in the same period last year.

The BOP shows a summary of a country’s transactions with the rest of the world. Components include trade, foreign direct and portfolio investments, and even remittances from Filipinos abroad.

A deficit means more money went out of the economy while a surplus means otherwise.

Cash remittances from Filipinos abroad rose 6.2 percent to $4.13 billion in the first two months from $ 3.89 billion in the same period last year while net FDI inflows more than doubled to $587 million in January fro $263 million in the same month last year.

BSP Deputy Governor Diwa Guinigundo earlier said the country’s BOP position is expected to recover after volatile global financial markets early this year through improved inflows from cash remittances and revenues from the business process outsourcing (BPO) sector.

The BSP sees the country’s BOP position registering a surplus of $2.2 billion or 0.7 percent of gross domestic product (GDP) this year.

Guinigundo said the deficit recorded in the first two months was a result of the decision of the US Federal Reserve to hike interest rates in December as well as the economic slowdown in China.

The Philippines recorded a $2.62 billion BOP surplus last year, reversing the $2.86 billion deficit registered in 2014. The amount was well above the $2 billion surplus expected by the BSP for 2015.

BSP Governor Amando Tetangco Jr. traced the surplus last year to the sustained cash remittances from overseas Filipinos as well as net inflows of foreign direct investments.