Bangko Sentral ng Pilipinas on Friday revised downward the balance of payments target this year to a $2-billion surplus from an earlier assumption of $2.2-billion surplus, amid the volatility in the global financial markets.
BoP summarizes the country’s economic transactions with the rest of the world.
Bangko Sentral Deputy Governor Diwa Guinigundo said in a news briefing while the global financial environment was expected to remain volatile, the bullish business confidence would support continued entry of foreign direct investments.
“In revising the BoP assessment, we considered global developments, such as the new uncertainties coming from the exit of Britain from the eurozone [Brexit]… “ he said.
Guinigundo said the Chinese economy and the European Union started to normalize, while the domestic economy remained strong.
Monetary authorities considered the Philippines’ solid macroeconomic fundamentals in the revision of the BoP, he said.
Bangko Sentral revised upward the current account surplus forecast, but adjusted the projection for the financial account to an outflow from an initially projected inflow.
Gross international reserves are anticipated to end the year at $82.7 billion, an improvement from the actual $80.7 billion posted in 2015. At this level, the GIR could cover nine months worth of imports of goods and payments of services and income.
The current account surplus this year is expected to be higher at $5.8 billion, equivalent to 1.9 percent of gross domestic product, compared to the $5.7-billion estimate made in December 2015.
“This is due to the expected higher receipts from the services and primary income accounts. This is notwithstanding the expected widening of the trade deficit with the larger downward revision in the level of exports than that of exports,” Guinigundo said.
The full-year growth for goods exports this year is seen to moderate to 3 percent from the expected growth rate of 5 percent seen earlier.
Goods imports this year are expected to grow 7 percent, lower than the earlier projection of 10 percent.
“The sustained surplus in the current account is expected to be supported by overseas Filipino remittances and robust receipts from the business process outsourcing and tourism,” Guinigundo said.
Bangko Sentral maintained the earlier projection of 4 percent growth for remittances in 2016.