BSP sees 10% growth in BPO, tourism receipts

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) said earnings from the business process outsourcing (BPO) and tourism sectors may book double-digit growths this year.

The BSP said export revenue in BPO services may grow 10 percent to $24.4 billion this year from $22.1 billion last year. This was slightly higher than the previous projection of $24 billion.

BSP Department of Economic Statistics head Redentor Paolo Alegre said export revenues in the BPO sector rose 7.5 percent to $5.5 billion in the first quarter.

On the other hand, the central bank expects travel receipts to grow 10 percent to $7.7 billion this year from last year’s $7 billion.

Alegre earlier said tourism receipts jumped 51.4 percent to $2.1 billion from January to March.

The central bank expects cash remittances to grow by four percent to a record high of $29.2 billion this year from $28.1 billion last year.

Latest data from the BSP showed cash remittances went up 3.5 percent to $9.35 billion in the first four months from $9.04 billion in the same period last year, while personal remittances climbed four percent to $10.43 billion from $10.03 billion.

The central bank said the country’s external payments position would continue to bleed this year amid the strong import growth of capital equipment and raw materials to support the expanding economy.

It now expects the country’s balance of payments (BOP) to book a wider deficit of $1.5 billion from the original target of $1 billion this year.

The BOP is the difference in total values between payments into and out of a country over a period. A deficit means more foreign exchange flows out of the country to pay for the importation of more goods, services and capital than what flows in from exports.

Latest data showed the country’s BOP deficit swelled to $2.08 billion in the first five months from only $136 million in the same period last year due to the widening trade deficit.

On the other hand, the country’s foreign exchange buffer is expected to thin further with the gross international reserves declining to $80 billion or equivalent to seven months worth of import cover.

The buffer slumped to its lowest level in more than three years, thinning to $78.97 billon in May from the revised $79.61 billion in April due to strong outflows.

Likewise, the central bank now expects the current account deficit to swell to $3.1 billion or 0.9 percent of GDP this year, more than four times the previous projection of $700 million last December.