The net inflow of foreign exchange into the country is expected to top the initial estimate of $6.7 billion by the end of the year as developments offshore led to a higher-than-expected entry of “hot money” and robust growth in remittances.
The Philippines could end the year with record foreign reserves of $76 billion, the Bangko Sentral ng Pilipinas (BSP) chief said, backed by modest growth in remittances from overseas Filipinos and helping boost the balance of payments (BoP) surplus. The central bank’s previous forecast was for GIR to hit $74-75 billion this year. That forecast was already breached in October when figure reached $75.8 billion.
“We are reviewing the projection to take into account developments over the past months,” BSP Governor Amando Tetangco Jr. told reporters.
This year, remittances remained strong despite the lingering crisis in the eurozone and the weak economy of the United States because of the increasing demand for Filipino workers in alternative, foreign labor markets.
Fiscal and economic problems in the West have also prompted foreign portfolio fund owners to shift their money to emerging Asian markets such as the Philippines where growth outlook was much better.
Strong inflows of foreign currencies into the country this year are credited for helping improve the country’s creditworthiness.
The central bank said the rising BOP surplus and GIR helped the country win the favor of the international financial community, which now sees the Philippines as being more capable to service its liabilities to foreign creditors and investors.
Posts
