MikeLigalig.com

By Des Ferriols
The Philippine Star

The country recorded a balance of payments (BOP) surplus of $1.19 billion in October reversing the previous month’s $95-million deficit, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

For the first 10 months of the year, the country had a balance of payments surplus of $7.849 billion, far above the official forecast of a $6.3-billion surplus for this year after 2006’s actual surplus of $3.77 billion.

Record remittances from around eight million foreign-based Filipinos, around 10 percent of the population, have boosted the country’s BOP and the peso, Asia’s best performing currency this year with gains of more than 13 percent.

Remittances are expected to climb towards the end of the year to pay for Christmas festivities and are expected to hit a new peak of $14.7 billion this year.

BSP Governor Amando M. Tetangco Jr. said the October surplus reflected the normalization of foreign exchange inflows after the market panicked over the fall-out from the crisis in the US’ mortgage sector.

“We’re just seeing the sustained foreign exchange inflows coming from overseas Filipinos, merchandise exports as well as net inflows of foreign direct and portfolio investments,” he said.

According to Tetangco, total inflows also reflected investment income generated by the BSP.

The September deficit brought the nine-month BOP surplus lower from $6.754 billion during the first eight months to $6.659 billion but by October, the year-to-date surplus surged anew to $7.849 billion.

Tetangco expects the full-year BOP surplus to reach over $7 billion by year end with the gross international reserve (GIR) lean at $32 billion.

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