The $506-million surplus was an improvement from the $142 billion posted a year earlier. The $2.72 billion year-to-date surplus was also better than the $2.08 billion notched in the same period last year.
"The July BoP surplus is due to BSP’s investment income and foreign exchange operations, as well as the deposit of the national government of the proceeds of its bond issuance," BSP Governor Amando M. Tetangco, Jr. said in a text message to reporters.
"Sustained investments inflows and overseas Filipino remittances for the period of January to July enabled the BSP to post a year-to-date cumulative BoP surplus," he added.
BSP Deputy Governor Diwa C. Guinigundo said remittances and foreign equity investments allowed them to carry out foreign exchange purchases.
"The purchases were made possible by reflows of foreign equity investments and sustained OFW (overseas Filipino worker) remittances," he said.
The BoP is the summary of a country’s trade and financial transactions with the rest of the world. Its current account component measures all trade in goods and services, and remittance flows from OFWs, while the capital and financial account indicates the movement of foreign investments in the country.
The BSP expects a BoP surplus of $700 million this year, more than seven times the $89 million posted last year. Monetary authorities, however, have said the target may be surpassed due to higher state borrowings and improved remittances.
Last month the government sold $750 million worth of global bonds to plug a swelling deficit and to fund vital infrastructure and social programs.
The government is also planning to tap additional official development assistance as well issue Samurai bonds to support its economic pump-priming efforts.
Lackluster revenues forced economic managers to raise this year’s deficit cap to P250 billion from P199.2 billion, a development that officials said would pressure on the government to borrow more.
State borrowings are expected to total P660.9 billion this year, higher than last year’s P501 billion.
Last Monday, the BSP reported that money sent home by OFWs hit a record $1.5 billion in June due to sustained demand for Filipino labor and wider access to financial services. The June result was up 3.3% from last year and brought the first half remittance tally to $8.48 billion.
The BSP expects remittances to reach $16.4 billion this year, the same amount Filipino workers sent home in 2008, due to the global downturn. Officials, however, said the projection may be adjusted upwards if remittance inflows continue to strengthen in the next few months.
