MANILA–The Philippines registered a deficit on its balance of payment (BOP) position in January 2017 but a central bank official remains optimistic on the full year outcome.
In the first month of this year, the country’s BOP posted a USD 9 million deficit, lower than month-ago’s USD 214 million deficit and year-ago’s USD 813 million deficit.
The Bangko Sentral ng Pilipinas’ (BSP) full year assumption of a surplus of USD 813 billion.
BSP Deputy Governor Diwa Guinigindo said a review of the target is on given the impact of external developments, which are hurting the country’s BOP position.
He, however, noted that the International Monetary Fund (IMF) now has a more welcoming projection for the global economy, with the growth target for this year set at 3.4 percent from last year’s 3.1 percent.
He also said Philippines’ export rose above 22 percent last January, 22.5 percent specifically based on the Philippine Statistics Authority (PSA) website, and remittances surpassed the 4 percent full year assumption for the year last January after it rose 8 percent.
“I think those are good signs that the robustness of those two accounts will continue together with good prospects in the global economy,” he said.
The central bank official also noted expectations for “some stability” in the coming months, due in part to normalization of oil prices and more rate hike projections from the Federal Reserve.
“If that’s the case we should also expect steady demand for our Overseas Filipino Workers (OFWs), particularly in the Middle East –the oil producing, oil exporting countries,” he said.
Another component of the BOP is the business process outsourcing (BPO), which Guinigundo said is in a delicate situation given the America-first policy of US president Donald Trump.
He, however, said that “based on anecdotal evidence they (BPO investors) continue to come.”
He said that “maybe it’s the expansion that is in question. That’s where the uncertainty is.”
“But I don’t think they will pull out, but they will remain. After all there are very few options or alternatives to the Philippines as a BPO hub,” he added.