NextGen Day

MANILA, Philippines — Increased inflows from overseas Filipino workers (OFWs), the business process outsourcing (BPO) industry, and foreign investments, as well as ongoing immunization against the coronavirus disease 2019 (Covid-19), are likely to help the country’s balance of payment (BOP) condition.

Despite the country’s first BOP deficit in four months in January, Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort is optimistic that things will improve in the coming months as remittances from OFWs remain strong and more countries strengthen Covid-19 vaccination programs.

According to Ricafort, global recovery prospects will be better if countries can eventually achieve population protection from the virus, which will help boost other structural inflows such as BPO revenues, foreign investments, foreign tourism receipts, and Philippine offshore gaming operators (POGO) revenues, in addition to OFW remittances.

“Continued growth in the country’s BPO sector amid the need for more outsourcing globally to make global businesses more competitive in the face of Covid-19 challenges could help bolster the country’s BOP and, in turn, GIR (gross international reserves) to new all-time highs in the coming months,” he said.

The balance of payments (BOP) is a record of a country’s overall transactions with the rest of the world during a specific time period.

Foreign direct investments (FDIs), which have recently risen to pre-pandemic and record highs, “could have also partly supported the BOP and GIR data,” according to Ricafort.

According to data from the Bangko Sentral ng Pilipinas (BSP), FDI net inflows totaled USD1.1 billion in November, up 96 percent year on year.

FDIs were USD9.2 billion at the end of November 2021, up 52.5 percent year on year.

“The CREATE (Corporate Recovery and Tax Incentives for Enterprises) law has recently supported stronger FDI data, which could continue in the coming months, potentially adding to the BOP and GIR data,” Ricafort explained.

The CREATE Act, or Republic Act 11534, gives tax breaks to domestic and foreign companies that set up shop in the Philippines.

Authorities believe this is the government’s largest anti-pandemic stimulus program because it will encourage more businesses to open domestic operations and create more jobs.

“In the coming months, any improvement in BOP and GIR could help provide greater cushion/support/buffer for the peso exchange rate vs. the US dollar, particularly against any speculative attacks,” he added.

Save/Share this story with QR CODE

---

Disclaimer

This article is for informational purposes only and does not constitute endorsement of any specific technologies or methodologies and financial advice or endorsement of any specific products or services.

📩 Need to get in touch?

📩 Feel free to Contact NextGenDay.com for comments, suggestions, reviews, or anything else.

---

We appreciate your reading. 😊Simple Ways To Say Thanks & Support Us:
1.) ❤️GIVE A TIP. Send a small donation thru Paypal😊❤️
Your DONATION will be used to fund and maintain NEXTGENDAY.com
Subscribers in the Philippines can make donations to mobile number 0917 906 3081, thru GCash.
3.) 🛒 BUY or SIGN UP to our AFFILIATE PARTNERS.
4.) 👍 Give this news article a THUMBS UP, and Leave a Comment (at Least Five Words).

---

AFFILIATE PARTNERS

World Class Nutritional Supplements - Buy Highest Quality Products, Purest Most Healthy Ingredients, Direct to your Door! Up to 90% OFF.
Join LiveGood Today - A company created to satisfy the world's most demanding leaders and entrepreneurs, with the best compensation plan today.

---