The balance of payments posted a deficit of $458 million in October, higher than the $368-million shortfall a year ago, as imports continued to outpace exports and after the government settled some of its maturing foreign debt, the Bangko Sentral ng Pilipinas said Monday.
It said other reasons for the cash outflows were the government’s net foreign currency withdrawals and foreign exchange operations of the Bangko Sentral. These were partially offset by the BSP’s income from investments abroad.
Data showed that on a cumulative basis, the BoP registered a deficit of $5.59 billion in January to October, amid the widening trade-in-goods deficit.
“The higher deficit may be attributed partly to the widening merchandise trade deficit [based on the Philippine Statistics Authority’s preliminary data] for the first three quarters of the year,” the BSP said.
“This, in turn, was brought about mainly by the sustained rise in imports of raw materials and intermediate goods as well as capital goods to support domestic economic expansion,” it said.
The BoP position reflected the final gross international reserves level of $74.71 billion as of end-October. At this level, the BSP said the GIR was equivalent to 6.8 months’ worth of imports of goods and payments of services and primary income, above the international benchmark.
It was also equivalent to 5.7 times the country’s short-term external debt based on original maturity and 3.9 times based on residual maturity.
The BoP position in September posted the biggest deficit in nearly five years at $2.7 billion, pulled down mainly by the government’s payment of its foreign exchange obligations.
The Philippine Statistics Authority said the trade-in-goods deficit hit $3.9 billion, bringing the nine-month trade deficit to $29.9 billion, up from $17.5 billion a year ago.
The Bangko Sentral earlier said it was expecting the balance of payments this year to post a wider deficit of $1.5 billion instead of $1 billion that was projected earlier. It said this was due to the strong importation of capital equipment and raw materials.
The balance of payments registered a deficit of $863 million in 2017.