THE country’s balance of payments’ position in September posted the biggest deficit in nearly five years at $2.7 billion, pulled down mainly by the government’s payment of foreign exchange obligations, the Bangko Sentral ng Pilipinas said Friday.
Data showed the September deficit was a reversal of the $24-million surplus a year ago and the $1.272-billion surplus a month ago. The gap in September was the BoP’s biggest since the $4.48-billion deficit registered in January 2014.
The September figure brought the BoP deficit in the first nine months to $5.136 billion, significantly higher than the $1.367-billion gap in the same period last year.
“Outflows in September 2018 stemmed mainly from foreign exchange operations of the BSP and payments made by the national government for its foreign exchange obligations. These were partially offset, however, by the net foreign currency deposits of the national government,” the central bank said.
The Bangko Sentral said the higher deficit on a cumulative basis could be attributed partly to the widening merchandise trade gap in the first eight months of the year.
“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 regulator said the BoP position was consistent with the final gross international reserves level of $74.94 billion as of end-September 2018.
“At this level, the GIR represents a more than ample liquidity buffer and is equivalent to 6.8 months’ worth of imports of goods and payments of services and primary income. It is also equivalent to 5.9 times the country’s short-term external debt based on original maturity and 4.2 times based on residual maturity,” it said.
Data from the Philippine Statistics Authority showed that trade-in-goods deficit in August 2018 expanded to $3.51 billion from a $2.74-billion gap a year ago as the 11-percent growth in imports outpaced the 3.1-percent increase in exports.
The figures brought the trade deficit in the first eight months to $26 billion, significantly higher than the $15.791-billion gap a year ago.
The balance of payments summarizes the country’s economic transactions with the rest of the world, with a deficit indicating that foreign exchange payments outstripping receipts and a surplus the reverse.
Persistent surpluses help build up the country’s gross international reserves, an ample supply of which helps prop up the peso vis-à-vis the US dollar and keep domestic inflation at bay.
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 projected earlier, due to the strong importation of capital equipment and raw materials to support the economy.
The balance of payments registered a deficit of $863 million in 2017.