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BoP position reverts to shortfall in June

July 20, 2019

THE country’s balance of payments (BoP) position reverted to an eight-month high deficit in June, trimming the year-to-date tally.

The Bangko Sentral ng Pilipinas (BSP) reported on Friday that last month’s $404-million shortfall reversed May’s $928-million surplus, but added that it was smaller than the $1.177-billion deficit a year ago.

It was also the largest shortfall since last October, when the payments position stood at a deficit of $458 million.

“The substantial outflow in June 2019 stemmed from the principal and interest payments of the national government on its foreign exchange obligations,” the central bank said in a statement.

These were partially tempered by the government‘s net foreign currency deposits and the central bank’s foreign exchange operations, as well as income from its investments abroad.

The January-to-June tally dropped to a $4.788-billion surplus from $5.193 billion in the first five months of 2019. It, however, erased the $3.257-billion shortfall in the same period last year.

Despite the decline, the year-to-date tally remained higher than the central bank’s upwardly revised forecast of a $3.7-billion surplus for this year.

“The surplus may be attributed partly to remittance inflows from overseas Filipinos during the first five months of the year and net inflows of foreign direct investments during the first four months of the year,” the Bangko Sentral explained.

Personal remittances reached $13.707 billion in January to May, up 4.1 percent from the $13.172 billion posted a year earlier.

Net foreign direct investments hit $2.903 billion in the first four months, down 14 percent from the amount in the same period in 2018.

The payments balance position reflects the final gross international reserves level of $85.77 billion as of end-June, according to the BSP.

The BoP ended at a deficit of $2.306 billion last year, wider than the $863 million recorded in 2017, but lower than the BSP’s $5.5-billion forecast.

Credit belongs to : www.manilatimes.net

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