THE country’s balance of payments (BOP) surplus would still end the year higher despite some reversal of capital flows in the previous months amid lingering uncertainties in the advanced economies, according to the Bangko Sentral ng Pilipinas.

BSP Governor Amando Tetangco Jr. said the reversal of capital flows are not expected to be large-scale, adding that the country’s economic fundamentals remained solid.

“Our fundamentals continue to point to positive growth in remittances. In addition, I think core portfolio funds that have come into the country will remain,” the BSP chief said.

Money sent home by Filipinos working abroad grew by 11.1 percent to reach $1.7 billion in August compared with $1.5 billion last year. This brought the cumulative remittances to grow by 6.9 percent to $13 billion, with cash transfers from land- and sea-based workers expanding by 5 percent and 14.4 percent, respectively.

However, external trade remained a drag to the overall growth of the economy. Exports, which accounts for about two-fifths of the country’s gross domestic products based on expenditure terms, shrank 15.1 percent year-aåon-year in August amid a fall in external demand for electronics and semiconductors. This was the steepest drop since September 2009.

Similarly, transactions in foreign portfolio investments yielded lower net inflows of $150 million in September, down by 69.7 percent from $494 billion in the same period last year as a result of bearish investor sentiments on risky assets.

This development can explain why the country’s balance of payments surplus slowed in September to $719 million, or more than 76 percent lower than the $3.062 billion posted in the same period last year. However, last month’s figure has brought the cumulative BOP surplus to $9.721 billion, up 51 percent from $6.443 billion in the same nine-month period last year.

“On [BOP], I don’t believe reversals of capital flows will be large-scale. Our external position would therefore still be healthy. In any case, BSP has tools in its enhanced policy kit to ensure capital movements would be non-disruptive,” Tetangco said.

BOP is a summary of the economic transactions of a country, such as current and capital and financial accounts, with the rest of the world.