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THE
country’s balance-of-payments (BOP) position turned to a
deficit of $248 million in June after a string of
surplus performance since the start of the year.
“The
deficit of $248 million was due mainly to outflows
arising from loan repayments, debt-service payments by
both the national government and the BSP, as well as
portfolio investment outflows,” said Bangko Sentral ng
Pilipinas (BSP) Governor Amando Tetangco Jr. in a text
message Wednesday.
Despite
the deficit situation in June, the payments position
remained in a state of surplus totaling $1.934 billion
in the first six months, Tetangco said.
The BOP
is what’s left after the country’s foreign-exchange
expenses have been deducted from its foreign- exchange
earnings. It is a sum of a nation’s transactions with
the rest of the world.
Monetary
officials earlier estimated the BOP position would stand
in a surplus of at least $2.5 billion this year.
This
estimate compares with last year’s surplus of $8.57
billion.
Tetangco
said the continued foreign-exchange inflows from the
remittances of millions of overseas Filipinos, as well
as receipts from merchandise exports, the investment
income of the BSP and the sustained foreign direct
investments more than compensated for the BOP deficit in
June.
The
surplus in May was $42 million.
Meanwhile, a former BSP official said on Wednesday the
economy is in the hands of capable and seasoned monetary
officials who could steer the country out of its
troubles.
In a
telephone interview, former BSP governor Gabriel Singson
said incumbent BSP Governor Tetangco and his deputies,
including members of the policymaking Monetary Board
(MB), are all competent professionals.
“I am
confident the present BSP leadership knows what to do
with the country’s problems. After all, this is not
their first crisis. These are experienced people,” he
said.
Tetangco
and Deputy Governors Diwa Guinigundo, Nestor Espenilla
and Armando Suratos have each put in more than 30 years
at the BSP, their combined central-banking experience
having exceeded 100 years.
Singson
also said the broad consensus was for the Philippines
“to better able manage the economic downturn than other
countries in Asia.”
He
pushed aside concerns over the now-weakening peso:
“Considering that it appreciated last year by some 19
percent and has now deteriorated by 8 percent or 9
percent, I think it is not so bad.”
On
inflation, he said a confluence of factors, most of
which were externally induced, “conspired to make the
average rate still higher to 11.4 percent in June.”
He
believes inflation has not yet peaked, but he would not
put a number as to how much higher it would go.
“The
factors pushing it higher are something beyond the
country’s control and is not uniquely felt in the
Philippines alone.
“But if
the BSP keeps raising interest rates, they will end up
killing businesses and growth,” Singson warned.
He said
Tetangco and six other members of the MB were widely
seen to raise the policy rates “by at least 25 basis
points.”
This
means pushing the rates at which the BSP borrows from or
lends to banks on overnight basis to 5.5 percent and 7.5
percent, respectively.
Singson
said there are many other monetary tools in the BSP tool
kit, such as the banks’ deposit-reserve ratios that
could be used to combat inflation.
“But I
will not recommend it,” he stressed.
He
likewise urged the government to adopt “austerity
measures” like those adopted in the 1970s when the
Organization of Petroleum Exporting Countries first
started selling their oil at higher prices in an
organized manner.
“We
should adopt measures that reduce our consumption of oil
and start exploring alternative sources of energy like
wind and solar power,” Singson said.
According to him, the escalating price of imported oil
was not expected to settle down and scale back at any
time soon.
“But I
remain confident the BSP leadership knows exactly what
to do,” Singson said. |
