The overall balance of payments (BOP) for January-June 1999 yielded a surplus of $2.877 billion, an 84.5 percent increase over the year-ago surplus of $1.559 billion. This represented 7.5 percent of GNP, the highest ratio recorded in the 1990s. The improvement came mainly from the bigger surplus in the current account.
The large trade in goods surplus of $213 million posted in May continued in June, albeit lower at $187 million as imports increased by 18.1 percent while exports expanded by 19.6 percent. The Increase in June imports, was due to the 26.4 percent surge in the purchases of raw materials and intermediate goods.
Merchandise exports reached $15.803 billion for the first six months of the year, growing by 13.6 percent. A noteworthy development is the sustained double-digit growth of electronics products, which at 20.25 percent was well within the industry’s target for the year and consistent with the revised 1999 growth projection of world demand of 20 percent. Aside from electronics, machinery and transport equipment exports remained a top export gainer.
Meanwhile, the capital account recorded a net inflow of $2.410 billion, with sustained net flows of medium and long-term loans and investments. The local equities market remained attractive as portfolio flows netted $631 million.
The latest current account and overall BOP positions are now close to the external targets for the whole year. The overall BOP surplus for 1999 is projected at $3.16 billion surplus compared to the actual level of $2.877 billion, while the current account target is a $1.665 billion surplus, already exceeded by the actual level of $2.228 billion.
Meanwhile, the BSP is now in the fourth month of implementing the revised bank reporting system on foreign exchange transactions. Pursuant to the recent efforts to intensify the improvement in monitoring external transactions, peso conversion accounts have been broken down into various categories including travel and personal income and lodged with their proper classification under the services account. This was made possible by better information derived from the new bank reports launched in April 1999.