The country’s balance of payments (BOP) surplus in September narrowed sharply to $719 million from $2.72 billion in August, the Bangko Sentral ng Pilipinas (BSP) said on Wednesday.
Despite the lower figure, this marked the seventh monthly surplus this year. The country’s total BOP surplus, indicating excess foreign-exchange earnings, has now reached $9.72 billion in the first nine months of the year—or $3 billion more than the full-year BOP surplus forecast of only $6.7 billion—pointing to the further strengthening of the peso against the US dollar.
“We are still running way ahead of our current projections,” BSP Governor Amando Tetangco Jr. said in a mobile-phone message. “There may be some rebalancing of investor portfolio positions going forward due to uncertainties in the global arena.”
Last year the Philippines had a record BOP surplus of $14.3 billion.
The continued surplus effectively nullifies the BSP’s earlier apprehension given the growing uncertainty in many economies around the world, which could lead to fluctuations in the flow of foreign capital to emerging markets like the Philippines.
Tetangco had said the region was not spared the effects of persistent global turmoil represented by the debt crisis in some countries in Europe and the weak growth prospects in the United States, which is a major market for Philippine goods.
Tetangco also said that in recent months, regional currency movements had been volatile, while risk perception increased and business confidence waned, posing policy dilemmas for regulators.
“As uncertainty escalated, risks have intensified. The likely impact would be a break on the growth
momentum and short-term fluctuations in the region’s capital flows,” he said.
This apprehension was reflected in the most recent analysis by the global lender HSBC, showing that capital-flow volatility is still a major risk for Asia.
In the case of the Philippines, for instance, the country’s short-term debt as a share of the country’s foreign-exchange reserves was estimated at around 10 percent, or lower than Malaysia’s 12 percent or 13 percent.
Taiwan, Thailand and Malaysia have comparably larger short-term debt relative to their stock of foreign currency reserves, according to HSBC.
(With Bloomberg News)
