On the day Mayan prophecies said the world would end, the
Philippines made an accounting of its dealings with the rest of the
globe.
The Bangko Sentral ng Pilipinas on Friday
reported that third quarter payments position slipped to $4.5 billion
from $4.7 billion year-on-year.
Despite the
narrower surplus figures, the numbers still reflect nearly eight years
in a row that the balance of payments (BOP) registered net inflows since
2005, Bangko Sentral data showed.
The BOP also
posted a $5.8-billion surplus in the first nine months of the year, or
40 percent narrower than the $9.7 billion a year earlier.
In a statement distributed to reporters, Bangko Sentral attributed the
lower surpluses to a “lower balance in the capital and financial
account, as portfolio investments weakened due to uncertainties in the
global financial markets and concerns about the the strength of the
global economic recovery.”
The current account,
buoyed by gains in merchandise trade, current transfers and services,
continued to drive the Philippines' payments position, Bangko Sentral
Deputy Gov. Diwa Guinigundo said in a press conference Friday.
The current account surplus widened by 33.6 percent to $3.1 billion –
equivalent to 5 percent of the gross domestic product (GDP) – in the
third quarter from $2.3 billion or 4.2 percent of GDP a year earlier,
Bangko Sentral noted.
The current account in the
first nine months likewise saw a wider surplus of $7.2 billion or 4
percent of of GDP from $5.1 billion.
Bangko
Sentral also noted narrower deficit in merchandise trade and higher net
receipts in current transfers and services which accounted for the drop
in net receipts in the income account.
Guinigundo said the net inflows were supported by income from tourism
and services, business process outsourcing, and higher remittances by
overseas Filipinos. New markets were also found for Philippine exports
and overseas Filipino workers.
The strong peso
tempered the increase in orders for semiconductors and electronic
products, Guinigundo noted, saying “more orders are coming in than are
delivered, so our exporters have to produce more.”
Guinigundo said exporters have "to shape up and compete without the help of a weak currency."
While fiscal and monetary authorities were able to tame inflation, the
central bank official noted the stronger peso was countered by higher
prices of imported of oil and raw materials,
prices.
Despite the drop in portfolio investments to $2.2 billion from $5.6
billion “due to risk aversion, the flows kept coming in” Guinigundo
said. This meant that confidence in the economy is being sustained, he
noted.
What makes the country attractive is the
“value for money wage levels” that, though on the high side, remain
competitive with those of China and other Asian countries.
In fact, Guinigundo said the economy now “mimics the situation of an
investment grade because we have been given investment grade debt
spreads and other indicators.” — VS GMA News
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