Philippine BOP to drop by half this year

The Philippines' balance of payments (BOP) is to have a surplus of 4.4 billion U.S. dollars this year, less than half of last year's amount at 9.24 billion dollars, the central bank said on Friday. Assistant Governor Ma. Cyd Tuano-Amador told reporters in a briefing that the surplus will be driven by the "positive" fundamentals of the country, but will be narrower due to "global developments." Central bank director Zeno Abenoja tagged the ongoing debt crisis in Europe and the slow growth in the United States as reasons for investors' likely risk aversion. Of the total BOP, the current account surplus, which accounted for the bulk of the BOP, is expected to hit 7 billion U.S. dollars this year. As of the first quarter, the current account surplus stood at 3.4 billion dollars. For this year, remittances from overseas Filipinos are projected to grow 5 percent, while exports and imports may expand 11 percent and 13 percent, respectively. Meanwhile, foreign direct investments (FDI) to the Philippines are seen to hit 3.2 billion dollars, while portfolio placements may surge to 4.4 billion dollars. FDI and hot money inflows are part of the capital account segment of the BOP. The Philippines has been on a BOP surplus since 2005.