By Joann Villanueva
Philippine monetary authorities have revised upwards the Bangko Sentral ng Pilipinas’ (BSP) balance of payments (BOP) projections based on the expected global economic recovery next year, improvement in remittances, foreign direct investments (FDIs), and foreign reserves.
This year’s latest BOP figure is a surplus of US$8.1 billion or about 2.2 percent of domestic output, up from an earlier projection of USD0.6 billion surplus. For 2021, the forecast is a surplus of USD3.4 billion.
“The BOP projections represent our views on the likely path of global economic recovery, as well as the prospects for trade activity and foreign exchange inflows into the economy,” BSP Governor Benjamin Diokno said in a virtual briefing Thursday.
BOP sums a country’s total transactions with the rest of the world for a specific period.
Diokno said the latest BOP figure for this year took into account the revision in the projected growth of remittances from overseas Filipino workers (OFWs) for this year, which is now at -2 percent from -5 percent earlier.
He said other factors are the better-than-expected recovery of the global economy next year due to the reopening of economies, as well as narrower-than-expected trade-in-goods deficit.
Another factor is the revision of the 2020 FDI forecast from a contraction of 45.9 percent last May to a contraction of just about 27.1 percent, based on the decision of the policy-making Monetary Board last October, he said.
“With the gradual opening of the economy in the Philippines and in other jurisdictions, we expect to see more positive developments in the external sector accounts in the next few months and years,” he added. (PNA)