MANILA – The Philippine balance of payments (BOP) position registered a deficit for the seventh consecutive month in July, the Bangko Sentral ng Pilipinas (BSP) said.
Data released by the central bank showed that the country registered a $455-million deficit in July, albeit than the $678-million deficit in the same month last year, and the $1.177-billion deficit in June.
The BOP consists of Philippine transactions with the rest of the world during a specific period. A surplus means more funds entered the country, while a deficit means more funds went out.
This is the seventh consecutive month that the country registered a deficit since it reported a $531-million deficit in January this year.
“Outflows in July 2018 stemmed mainly from payments made by the National Government (NG) for its maturing foreign exchange obligations and foreign exchange operations of the BSP,” the central bank said.
“These were partially offset, however, by net foreign currency deposits of the NG and income from the BSP’s investments abroad during the month,” it said.
University of Asia and the Pacific School of Economics Dean Cid Terosa noted payments gap was expected in light of the wider base last year.
“Given the high deficit for the same month last year, it was expected to be lower this time,” he said in a separate text message.
“I believe it will be a bit narrower due to stronger global trade towards the last quarter,” Terosa noted.
In January to June, the BOP position registered a deficit of $3.712 billion which was wider compared with the $1.384-billion deficit the first seven months of 2017.
“The higher cumulative BOP deficit for the period may be attributed partly to the widening merchandise trade deficit for the first half of the year that was brought about by the sustained rise in imports of raw materials and capital goods to support domestic economic expansion,” the central bank said.
The BSP earlier announced a payments deficit target of a $1.5 billion this year.
Teros said the central bank may not hit its target. “We may not be able to meet the target but we won’t be far from it,” he said. (GMA News)
