MANILA, Philippines - The Bangko Sentral ng Pilipinas cut its forecasts for gross international reserves (GIR) and balance of payments (BOP) this year, as it anticipates the effects of the euro zone crisis on investments.
The BSP revised its GIR projection from $79 billion to a range of $77.5 billion to $78 billion. For BOP, it reduced its forecast from a surplus of $2.8 billion to $2.6 billion.
"The revisions took into account latest, actual figures and prospects for future inflows," BSP Governor Amando Tetangco Jr. told reporters. He said the downward adjustments in the GIR and BOP forecasts were made on the expectation that foreign investments would be less.
In March, net inflow of foreign direct investments amounted to $14 million, 91% down from $158 million in the same month last year. In April, foreign portfolio investments posted a net inflow of $333.43 million, 51% lower than the $673.8 million posted during the same month in 2011.
The drop in net inflows of foreign portfolio and direct investments were mainly blamed on the euro zone woes.
However, Tetangco said the BSP's original forecast for remittances and exports remain. Remittances are expected to grow by 5%, while exports are expected to jump 10% this year.