The country’s balance of payments incurred a deficit of $7 million in August, bringing the total shortfall in the first eight months to $1.39 billion.
Data from the Bangko Sentral ng Pilipinas showed that the August deficit narrowed from the $678-million registered in July.
The Bangko Sentral said outflows in August were largely offset by the national government’s net foreign currency deposits and Bangko Sentral’s income from its investments abroad.
“The reduced deficit also reflected the thin trading of portfolio investments during the ‘ghost’ month [August],” it said.
The $7-million August deficit, however, was still a reversal of the $682-million surplus recorded in the same month last year.
The overall BoP position posted a $1.391-billion deficit in the first eight months, a turnaround from the $1.531-billion surplus a year ago.
“The cumulative deficit was largely accounted for by portfolio investments which, for the period January to August this year, reversed to net outflows of $319 million from $2.1-billion net inflows during the same period last year on the back of domestic and global developments including the US Federal Reserve interest rate hike, global terrorism concerns, and closure orders for some mining companies in the country,” the Bangko Sentral said.
Former Environment secretary Gina Lopez in February this year ordered the suspension and closure of a number of mining companies.
BoP summarizes the country’s economic transactions with the rest of the world, with a deficit indicating that foreign exchange payments exceed inflows. A BoP deficit affects the value of the peso against the US dollar and eats into the country’s gross international reserves.
Data from the Philippine Statistics Authority showed that the Philippines posted a merchandise trade deficit of $14.7 billion in the first seven months, slightly lower than the $15.4-billion shortfall a year ago.
Bangko Sentral Deputy Governor Diwa Guinigundo said current account, one of the main components of the balance of payments, posted a lower deficit of $234 million in the first half, compared to the $424-million deficit a year earlier.
The deficit accounted for around 0.2 percent of GDP. Guinigundo said the improvement in the current account was driven by increased net receipts in the trade-in services and secondary and primary income accounts which partly negated the widening deficit in the trade-in goods account.
The Bangko Sentral expects the BoP to post a $500-million shortfall this year, a revision of the previous estimate of a $1-billion surplus.
Current account is also projected to register a deficit of $600 million this year from the actual surplus of $600 million last year.