BOP deficit widens to $5.14 B in September
The country’s cumulative balance of payments (BOP) deficit has widened to $5.136 billion as of end-September this year after last month’s $2.696 billion shortfall due to higher outflows and a running trade gap.
In a statement, the Bangko Sentral ng Pilipinas (BSP) said outflows from its external sector operations and withdrawals by the government contributed to the $2.696 billion BOP deficit for the month of September. This reversed the $24 million surplus same time in 2017 and the $1.272 surplus recorded in August this year.
“Outflows in September stemmed mainly from foreign exchange operations of the BSP and payments made by the National Government (NG) for its foreign exchange obligations,” said the BSP. “These were partially offset, however, by the net foreign currency deposits of the NG.”
The January-September BOP deficit of $5.14 billion was higher than the previous year’s $1.367 billion because of the country’s widening merchandise trade deficit. As of end-August, the trade gap has amounted to $26 billion, up 65 percent year-on-year.
The BSP noted that the sustained rise in imports of raw materials and intermediate goods as well as capital goods to support domestic economic expansion has resulted to the higher BOP deficit.
The BSP also reported a final gross international reserves (GIR) level of $74.94 billion as of end-September. “At this level, the GIR represents a more than ample liquidity buffer,” it said.
The BSP remains confident that the BOP position is still consistent with the GIR level which is equivalent to 6.8 months' worth of imports of goods and payments of services and primary income and up to 5.9 times the country's short-term external debt based on original maturity and 4.2 times based on residual maturity.
The BSP will come out with a revised BOP projection within the month. It last adjusted its overall external sector projection in June where it estimated a BOP deficit of $1.5 billion for 2018. The GIR is projected to be around $80 billion by the end of this year.
Last year, the BOP shortfall stood at $863 million while the GIR was at $81.569 billion.