Philippines may miss BOP targets for this year

MANILA, Philippines - The Philippines’ may miss its balance of payments (BOP) surplus targets for this year although it would be bigger than last year, the Bangko Sentral ng Pilipinas (BSP) said. Originally projected to reach $2.3 billion, the country’s BOP – the resulting figure after imports are subtracted from exports – may only hit $500 million this year. Nevertheless, the figure remains a far cry from the $88 million BOP surplus left over from 2008. “The BOP surplus could easily better last year’s surplus," BSP Governor Amando M. Tetangco Jr. said late Wednesday at the end of the economic forum hosted by Security Bank. Lower fuel costs have prompted the country to pay for fewer dollars for its oil consumption, an advantage that may be enhanced by softer exports. Expectations of lower export demand help reduce raw material imports, thereby cutting foreign exchange spending. But at the same time, it would also lower dollar receipts from exports. Nevertheless, Tetangco stressed that the surplus is expected to be supported by the national government’s borrowing as well as foreign funds from official development assistance programs booked early this year. The country’s foreign exchange reserves is seen to hit $37.5 billion this year, a notch higher than 2008’s $37.1 billion, Tetangco said. Given these levels, the BSP remains comfortable with its dollar supplies. While officials have yet to formulate a new BOP position based on this new estimate, expected foreign reserves for 2009 is equal to over five months of imports and services and income and over four times the Philippines’ short-term external debt. The country’s gross international reserves (GIR) surged to $37.1 billion as of end-2008, exceeding expectations. Earlier, the GIR for 2008 was seen to reach $36 billion only. - GMANews.TV