THE country’s balance of payments (BoP) deficit ballooned in September, the Bangko Sentral ng Pilipinas (BSP) reported on Friday, hitting an over four-year high and boosting the year-to-date figure past the $5-billion mark.
September’s $2.696 billion result reversed the $1.272-billion and $24-million surpluses recorded in August and a year earlier. It was the largest since January 2014 when the payments position stood at a deficit of $4.48 billion.
“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,” the Bangko Sentral said in a statement.
These were partially offset by net foreign currency deposits of the national government, it added.
September’s result brought the nine-month payments balance to a $5.136-billion deficit, significantly wider than the $1.367 billion recorded in the same period last year.
It was also significantly higher than Bangko Sentral’s $1.5-billion forecast.
“The higher deficit may be attributed partly to the widening merchandise trade deficit (based on the Philippine Statistics Authority’s preliminary data) for the first eight months of the year,” the central bank said.
“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 added.
The trade deficit widened by 64.7 percent in January-August to $26.003 billion, from $15.791 billion a year earlier, based on latest available data.
The Philippines ended 2017 with a BoP deficit of $863 million, narrower than the revised $1.038 billion posted in 2016.
The central bank said last month’s payments balance position was consistent with the country’s gross international reserves (GIR) 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 added.
The GIR 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, the BSP said.