THE Bangko Sentral ng Pilipinas (BSP) on Friday revised downward its balance of payments (BOP) projection for 2016, on account of the possible impact of recent global developments on the Philippine economy.
In a press briefing, the central bank released its reassessment of the 2016 BOP surplus projection, down to $2 billion, from $2.2 billion, as earlier projected in December 2015.
The BOP refers to the sum of all transactions of the Philippines, both private and public, with the rest of the world.
The BSP said the revised projection incorporates the latest available data reflecting the recent and prospective economic developments, both domestic and global, that could have a bearing on the outlook for the country’s external payments position.
BSP Deputy Governor for the Monetary Stability Sector Diwa C. Guinigundo, meanwhile, said as of the moment, concerns on global developments are more burdensome to the market compared
to local developments.
Among the concerns in the global front include the US Federal Reserve’s dovish stance on monetary policy, the economic path of the Chinese economy and the looming withdrawal of the United Kingdom from the European Union.
The financial account is seen pulling down the entire BOP position, as it is the component easily swayed by the change of market sentiment in both the global and local scene.
“While the projected surplus in the current-account balance has been revised upward, the financial account is expected to result to an outflow from an initially projected slight inflow in 2016,” the
central bank said.
The 2016 current-account surplus is seen to be higher at $5.8 billion. This is equivalent to 1.9 percent of GDP. It is slightly up from the $5.7 billion forecasted in December.
“This is due to the expected higher receipts from the services and primary income accounts,” the central bank said.
The bulk of the services account is coming from the business-process outsourcing (BPO) revenues, while remittances will push primary income accounts upward.
The central bank’s projection on both the BPO industry and remittance inflows remain unchanged.
The BPO industry is projected to grow by 15 percent this year, nearing the annual level of remittance inflows for the year.
For remittances, meanwhile, it is still expected to grow at a steady pace of
4 percent.
For the trade sector, the BSP projects the full-year growth for goods exports in 2016 to moderate to 3 percent, from an earlier expected growth rate of 5 percent in December.
“This considers the subdued outlook for the global economy and further decline in commodity prices,” the central bank said.
Goods imports are also expected to grow lower to 7 percent from an earlier projection of 10 percent, on account of the decline in energy and metal prices.