The Market Monitor Minding the Nation's Business
By Riza Lozada
The overall balance-of-payments (BOP) surplus in 2016 is expected to taper off to $2.0 billion from $2.2 billion in the December 2015 projection, the Bangko Sentral ng Pilipinas (BSP) reported.
The year-end gross international reserves (GIR) are projected to be about $82.7 billion, from $80.7 billion last year.
The GIR level will cover about nine months’ worth of imports of goods and payments of services and income, the BSP said.
The 2016 current account surplus is seen to be higher at $5.8 billion equivalent to 1.9 percent of gross domestic product (GDP), compared with $5.7 billion in the December 2015 projection.
The full-year growth for goods exports in 2016 is expected to moderate to 3 percent from an expected growth rate of 5 percent in December 2015.
This considers the subdued outlook for the global economy and further decline in commodity prices.
Goods imports for 2016 is expected to grow by 7percent, lower than the earlier projection of 10 percent in December 2015.
The sustained surplus in the current account is expected to be supported by overseas Filipino workers (OFW) remittances and robust receipts from the business-process outsourcing (BPO) and tourism sectors.
The BSP also reported that the country’s BOP position yielded a deficit of $210 million in the first quarter, a reversal of the $877 million surplus registered during the same period last year.
The BOP deficit was due to higher net outflows (or net lending by residents to the rest of the world). The financial account recorded net outflows at $959 million dominated by residents’ net repayment of loans and placement of deposits abroad.
Current accounts registered a surplus of $477 million (equivalent to 0.6 percent of GDP) in the first quarter, which was lower than the $2.2 billion surplus (3.2 percent of GDP) posted in the first quarter.
The trade-in-goods deficit widened to $8 billion in the first quarter from $4.8 billion a year ago, due to the decline in exports of goods by 11.9 percent and the expansion in imports of goods by 12.8 percent.
Exports of goods reached $9.2 billion in the first quarter from $10.5 billion a year ago as exports to major trading partners notably the United States, China and Japan exhibited declines during the quarter.
Weaker exports were attributed mainly to manufactures, which fell by 9.2 percent, particularly lower shipments of chemicals, garments, machinery and transport equipment, processed food and beverages, and other manufactures.
Higher imports of goods at $17.3 billion were due mainly to increased imports of capital goods, raw materials and intermediate goods, and consumer goods.