MANILA: The Philippines is likely to end the year with a balance of payments surplus of $4.4 billion, the Bangko Sentral ng Pilipinas said on Friday, backing views the peso would keep its long-term strength, despite an ongoing selloff in the currency. The peso hit a low of 44.17 to the dollar on Friday, its weakest since January 2012, as outflows increased on news the US Federal Reserve plans to begin scaling back its massive stimulus programme later this year, potentially reversing the flow of funds back to developed markets from emerging countries.
But policymakers were not concerned, saying the country's strong economic fundamentals will continue to support the currency, although it has weakened nearly seven percent so far this year.
"Once all the noise has died down, the Philippine growth narrative will continue to remain fundamentally sound, and we think that the peso will be seeing broad stability," Assistant Governor Cyd Amador told a media briefing.
Remittances from Filipinos abroad are seen growing five percent this year, while exports and imports are forecast to grow 11 percent and 13 percent, suggesting a recovery in trade as the outlook for the global economy improves.
BSP has revised its method of calculating current account and trade data. Under the old methodology, the balance of payments surplus in 2013 was forecast at $3 billion, while exports and imports were previously expected to post 10 percent and 12 percent growth.
The central bank also expects record gross international reserves of $87 billion this year.
Net portfolio inflows would probably total $4.4 billion this year, the central bank said, while foreign direct investment would likely reach $3.2 billion, still low compared to neighbouring countries.
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