The balance of payments (BOP) of the Philippines hit a surplus of 2.1 billion U.S. dollars in the first quarter bouyed by strong inflows from remittances, exports and services, the Bangko Sentral ng Pilipinas (BSP), or the Philippine Central Bank, said Thursday.

The BOP, which tracks an economy's transactions with the rest of the world and is a measure of external competitiveness, surged nearly three times from the 782 million U.S. dollars of surplus posted in the same period last year.

For the first three months, the current account stood at a surplus of 1.1 billion U.S. dollars, 59 percent higher than 733 million U.S. dollars of the same period last year.

The surplus was driven by higher exports, which grew to 10.7 billion U.S. dollars in the first three months from 9.4 billion U. S. dollars last year on strong exports of electronics and garments.

The surplus was also driven by the increase in business process outsourcing investments as well as increased tourism receipts.

Remittances, which grew to 2.9 billion U.S. dollars from 2.5 billion U.S. dollars, also boosted the current account surplus.

Meanwhile, the capital and financial account remained in surplus of 1.45 billion U.S. dollars in the first quarter but lower than 1.55 billion U.S. dollars of the same period last year.

Foreign direct investments stood at a net inflow of 430 million U.S. dollars from 386 million U.S. dollars while portfolio investments dropped to a net of 2.5 billion U.S. dollars from 3.1 billion U.S. dollars last year.

The decline was due to lower investments in equities and debt securities, which the BSP said was due to tight supply of government securities and lack of initial public offerings that would have attracted investments.

The robust BOP position brought the BSP's gross international reserves to 20.65 billion U.S. dollars in the first quarter, 11.6 percent higher than the end-December level of 18.49 billion U.S. dollars.

The level was equivalent to 4.3 months' worth of imports of goods and payment of services and income.

The level is also equivalent to 3.3 times the country's short- term external liabilities based on original maturity and 1.7 times based on residual maturity.

BSP Deputy Governor Diwa Guinigundo said the surplus is expected to continue and bring the BOP to the 1.6 billion U.S. dollar-surplus forecast this year.

"Remittances were up 10.8 percent in the first four months and we expect this to continue for the rest of the year," Guinigundo said.

Source: Xinhua