The balance of payments position swang to a surplus of $847 million in November from a deficit of $44 million in October, lifted by the foreign exchange operations of the Bangko Sentral ng Pilipinas and income from its investments abroad.
The November surplus was also a reversal from the $458-million deficit a year ago. This brought the balance of payments deficit in the first 11 months to $4.747 billion, up from a $1.78-billion shortfall in the same period last year.
The BSP said the inflows in November were partially offset by the payments made by the government for its foreign exchange obligations and its net foreign currency withdrawals during the month.
It said the higher cumulative BoP deficit for the period could be attributed partly to the widening merchandise trade deficit that was brought about by the sustained rise in imports of raw materials, intermediate goods and capital goods to support domestic economic expansion.
Data from the Philippine Statistics Authority showed that the country’s trade-in-goods deficit in October widened to a record $4.21 billion, from the $2.59-billion deficit a year ago, as imports’ growth continued to outpace exports.
Total exports were valued at $6.11 billion in October, up by 3.3 percent from $5.91 billion in October 2017. Total imports rose 21.4 percent to $10.32 billion from $8.50 billion in October 2017.
The reported BoP position reflected the final GIR level of $75.68 billion as of end-November 2018.
“At this level, the GIR represents a more than ample liquidity buffer and is equivalent to 6.7 months’ worth of imports of goods and payments of services and primary income. It is also equivalent to 5.6 times the country’s short-term external debt based on original maturity and 3.9 times based on residual maturity,” the BSP said.
The Bangko Sentral revised upward the balance of payments projection this year to a deficit of $5.5 billion, higher than the previous assumption of a $1.5-billion deficit made last May, on the back of bigger current account shortfall.
The revision is expected to result in the gross international reserves ending 2018 at $76 billion, lower than the previous estimate of $80 billion for the year.
Data showed that the current account, one of the main components of the balance of payments, yielded a deficit of $6.5 billion in the first three quarters, a turnaround from the $968-million surplus registered in the same period last year.
“This development was brought about primarily by the continued widening deficit in the trade-in-goods account despite the higher net receipts posted in trade-in-services, primary and secondary income accounts,” the Bangko Sentral said.
The BoP position registered a higher deficit of $1.9 billion in the third quarter compared to the $662-million deficit in the same quarter last year.
The current account also posted a deficit of $2.9 billion in the third quarter, a reversal from the $1.1-billion surplus a year ago.