BSP chief: Smuggling not a threat to PH economy

Posted at 05/20/14 4:58 PM

MANILA, Philippines - Bangko Sentral Governor Amando Tetangco says the Philippines' smuggling problem is not a big threat to the economy as some analysts have been saying.

In March, Deutsche Bank and Credit Suisse said the smuggling problem in the Philippines has caused imports to be understated. Because of that, instead of a trade surplus, the Philippines may have been running a trade deficit for several years now.

But Tetangco told CNBC's Street Signs this is not true.

"That is not accurate and that doesn't present the true picture. Assuming there are differences in valuations, and assuming that what is being claimed by certain analysts is factored into the current account, the net will still be a surplus," he said.

Tetangco added the Philippine economy could actually be stronger than initially thought.

"There could also be some understatement of our foreign exchange receipts, like receipts from exports, OFWs and from BPO services... But the bottom line is the current account continues to be surplus and it has been in surplus for over 10 years now, consecutively," he said.

Deutsche Bank and Credit Suisse cited "sizable" differences between the official import figures reported by the Philippine government and exports to the Philippines reported by its trade partners, including Japan, South Korea, Taiwan and China.

As of April, the Philippines was running a balance of payments deficit, meaning more money is flowing out of the country than into the Philippines. - ANC