MANILA, Philippines — The country’s balance of payments (BOP) position continued to weaken, recording a deficit for the fourth straight month in August as the “ghost month” spooked investors, further fueling capital outflows.
The Bangko Sentral ng Pilipinas (BSP) reported yesterday the country incurred a BOP deficit of $7 million in August, reversing the $682 million surplus recorded in the same month last year.
The latest deficit, however, was sharply narrower than the $678 million deficit recorded in July due to the national government’s net foreign currency deposits and the BSP’s income from its investments abroad.
For the first eight months of the year, the country registered a BOP deficit of $1.39 billion, a complete turnaround from the $1.53 billion surplus recorded in the same eight-month period last year.
The shortfall is almost 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 current account was expected to show a $600 million deficit this year, the first deficit since 2002.
The central bank said the volatile financial markets brought about by the normalization of interest rates in the US, global terrorism concerns, and closure orders for some mining companies in the country were the major factors behind the BOP deficit registered from January to August.
The domestic and external shocks translated to a net outflow of foreign portfolio investments or hot money amounting to $319 million in the first eight months versus the net inflow of $2.1 billion in the same period last year.
The BOP shows the summary of a 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 it imported more goods, services, and capital than it exported. A shortfall indicates more resources left the country than entered.