BOP swings to $813 M deficit in Jan, says BSP

More financial resources left than entered the country in January in a sign of pinch during the global financial volatility that greeted 2016, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

The country’s balance of payments (BOP) swung to a deficit of $813 million in January, a reversal of the $136 million surplus a year ago.

The BOP is a record of all economic transactions between a country and the rest of the world in a particular period.

“(This) was largely due to payments by the national government for its maturing for- eign exchange obligations and results of foreign exchange operations of the BSP,” central bank deputy governor Diwa Guinigundo told reporters in a text message.

BSP Governor Amando Tetangco Jr. said the deficit will prove to be only “temporary” later in the year.

“We see this as temporary and expect to see a turnaround later this year given steady remittances and receipts from the BPO sector,” Tetangco said.

The BOP includes, among others, foreign portfolio placements, exports and import receipts, overseas Filipino remittances, foreign direct investments, and public and private offshore borrowings and payments.

It also covers tourist and business process outsourcing receipts.

Luz Lorenzo, economist at Maybank ATR KimEng, said the deficit reflects the “sluggish” global economic situation where investors are seeking safe havens.

The peso, for instance, already lost one percent against the dollar so far this year from its 47.06 close on Dec. 29, the last trading day of 2015.