BOP surplus seen to fall below forecast

The country’s balance of payments (BOP) could be $1 billion to $2 billion lower than the Bangko Sentral ng Pilipinas’ forecast of a $2-billion surplus due to a slower export growth and higher oil prices during the first half of 2008, Socioeconomic Planning Secretary Ralph Recto said yesterday.

Nevertheless, Recto said Filipinos abroad would continue to send dollars home. This, he said, would significantly help the country’s BOP position. “The BOP surplus is going down. It could be $1 billion to $2 billion lower this year,” Recto said.

Earlier, BSP Governor Amando M. Tetangco Jr. said the country’s BOP this year will be lower than the $2-billion revised forecast but declined to provide estimates.

Compared to last year’s BOP surplus of $8.6 billion, this year’s surplus forecast is 76.7 percent lower. Earlier, the central bank said that this year’s BOP would hit $2.5 billion.

The BOP is closely watched by investors as it is a record of the country’s transactions with the rest of the world. A BOP surplus means that there were more dollar inflows than outflows while a BOP deficit means that there were more dollar outflows than inflows.

Latest data from the BSP showed that the country’s external payments position declined significantly last month amid the difficult economic landscape brought about by the global financial turmoil.

BSP data showed that the country posted a surplus of $345 million from January to October this year, a sharp decline from the surplus of $1.54 billion recorded in the January-September period. The latest surplus was also significantly lower than the $7.87 billion recorded in the same period last year.