BSP: Jan.-Oct. BOP surplus grows by 75%

The country's balance of payments (BOP) surplus rose by 75 percent to $9.276 billion in January-October this year from $5.299 billion in the same period last year, the central bank said Friday. The Bangko Sentral ng Pilipinas (BSP) said the BOP surplus already breached the full-year target of $8.2 billion as foreign equity continued to flood the Philippines. In October alone, the BOP surplus surged 205 percent to $2.736 billion from $896 million in the same month last year. The BOP surplus surged to $6.421 billion in 2009 from $29 million in 2008. The BOP refers to the difference of foreign exchange inflows and outflows on a particular period. It represents the country's transactions with the rest of the world. BSP Gov. Amando Tetangco Jr. said that the central bank is "mindful of the domestic liquidity implications of these foreign exchange inflows and we continue to monitor developments." "We are ready to calibrate any or all of the tools in our enhanced toolkit to ensure that the flows are orderly and do not create excessive volatilities," he added. Monetary authorities attributed to the country's strong external payments position to the robust foreign exchange inflows from higher investment inflows, disbursement of official development assistance (ODA) loans from multilateral lending agencies, and the money sent home by Filipinos abroad. Central bank data showed that money transfers by Filipinos abroad grew 7.8 percent to $13.782 billion in the nine-month period from $12.273 billion in the same period last year. The policy-setting Monetary Board has upgraded its growth forecast of the overseas Filipino workers' remittance to 8 percent from 6 percent due to the strong demand for Filipino skilled workers. The BSP has also upgraded the country's gross international reserves (GIR) to hit a new record level of nearly $60 billion this year due to sustained foreign exchange inflows. The country's GIR zoomed by 31.7 percent to a new record of $56.849 billion in October this year from $43.173 billion booked in the same period last year. According to the BSP, the current GIR level could cover 9.9 months of imports of goods and payments of services and income. The GIR is also equivalent to 10.3 times the country's short term external debt based on original maturity and 5.3 times based on residual maturity, he added. The country's GIR jumped 17.8 percent to $44.24 billion in 2009 from $37.55 billion in 2008 due to strong inflows, government deposits, and the increasing value of the central bank's gold holdings. -- JE/OMG, GMANews.TV