BOP shifts to deficit in October
The Bangko Sentral ng Pilipinas said the BOP position was in a deficit last month due to outflows that stemmed mainly from the foreign exchange operations of the central bank as well as the payments made by the national government for its maturing foreign exchange obligations. File
MANILA, Philippines — The country’s balance of payments (BOP) position weakened in October, recording a deficit of $368 million from a modest surplus of $24 million in September, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.
The BSP said the BOP position was in a deficit last month due to outflows that stemmed mainly from the foreign exchange operations of the central bank as well as the payments made by the national government for its maturing foreign exchange obligations.
The BOP deficit last October was also more than double the $183 million shortfall incurred in October last year.
For the first 10 months, the BOP incurred a deficit of $1.73 billion, a complete reversal of the $1.46 billion surplus recorded in the same period last year.
According to the BSP, the shortfall was partially offset by the national government’s net foreign currency deposits and income from the central bank’s investments abroad.
The BOP shows the summary of the country’s transactions with the rest of the world. Components include trade, foreign direct and portfolio investments and even remittances from Filipinos abroad.
A deficit means the amount of money going out of the country is more than the money coming in while a surplus means the country imported less goods, services and capital than it exported.
The shortfall as of end-October was more than three times the projected $500 million deficit for 2017. The BSP originally projected a $1 billion BOP surplus this year but the outlook was revised last June.
The central bank said the volatile financial markets brought about by the normalization path undertaken by the US Federal Reserve, global terrorism concerns, the rising tension between the US and North Korea as well as the closure orders for some mining companies in the country were the major factors behind the BOP deficit.
Latest data showed both personal and cash remittances contracted in September.
Despite the slowdown in September, personal remittances went up 4.8 percent to $23.16 billion in the first nine months while cash remittances inched up 3.8 percent to $20.78 billion.
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