By Lee C. Chipongian The central bank reported a balance of payments (BOP) deficit of $1.227 billion in the first quarter this year, surpassing the 2018 estimate of $1 billion. The Bangko Sentral ng Pilipinas (BSP) in a statement yesterday said that despite the January to March higher shortfall, they still think overall BOP will keep to their expected number. “We continue to expect the overall BOP position for the year to be very manageable,” said the BSP, noting that the higher cumulative BOP deficit “may be attributed partly to the widening merchandise deficit (based on Philippine Statistics Authority data) for the first two months of the year.” For March alone, the BOP deficit was lower compared to February, at $266 million from $429 million. Compared to same time in 2017 of $994 million, the shortfall was larger this year. “Outflows in March stemmed mainly from foreign exchange operations of the BSP and payments made by the National Government (NG) for its maturing foreign exchange obligations,” said the BSP. “These were partially offset, however, by net foreign currency deposits of the NG and income from the BSP’s investments abroad during the month.” The central bank said the BOP position remains “consistent” with the level of the country’s gross international reserves (GIR) which as of the end of the first quarter, was at $80.51 billion. The GIR level is still considered an “ample external liquidity buffer” and is equivalent to 7.8 months' worth of imports of goods and payments of services and primary income. It is also equivalent to 5.6 times the country's short-term external debt based on original maturity and 4.1 times based on residual maturity. Since the BSP expects a BOP deficit of $1 billion for 2018, the GIR projection is only $80 billion, lower than the actual $81.6 billion in 2017. In 2017, the BOP deficit stood at $863 million, higher than 2016’s $420 million. As noted by the BSP in several reports, the continued BOP deficit were not only because of a larger merchandise trade gap but also due to the reversal of foreign portfolio investments last year. The BOP and current account balances reverted to deficits after nine years of straight surpluses in the case of the BOP, and 13 years of surpluses for the current account. This year’s current account is also seen to be in a deficit of $700 million.