BOP deficit reaches $4.75 billion in 11 months
Published Dec 19, 2018 12:00 am
By Lee C. Chipongian
The country’s balance of payments (BOP) deficit dropped to $4.747 billion for the first 11 months from the previous $5.594 billion after reporting a surplus of $847 million in November.
MB file photo.
The end-November BOP deficit is higher compared to same period last year of $1.78 billion. In the meantime, the $847-million surplus for November is only the second monthly surplus recorded this year, after $1.272 billion last August. The November suplus is also a reversal of November 2017’s $44-million shortfall.
In a statement, the Bangko Sentral ng Pilipinas (BSP) said “inflows in November stemmed mainly from the BSP's foreign exchange operations and its income from its investments abroad during the month.”
The BSP added that these were “partially offset, however, by the payments made by the National Government for its foreign exchange obligations and its net foreign currency withdrawals during the month in review.”
As for the higher January-November cumulative BOP deficit, the central bank said this “may be attributed partly to the widening merchandise trade deficit (based on the Philippine Statistics Authority's preliminary data) for the first ten months of the year that was brought about by the sustained rise in imports of raw materials and intermediate goods as well as capital goods to support domestic economic expansion.”
The BSP also reported a final gross international reserves (GIR) figure as of end-November, of $75.68 billion.
The country’s GIR represents “more than ample liquidity buffer” and is equivalent to 6.7 months' worth of imports of goods and payments of services and primary income, it said. It is also equivalent to 5.6 times the country's short-term external debt based on original maturity and 3.9 times based on residual maturity.
Last December 14, the BSP revised its external sector projections. The BOP deficit’s earlier projection of $1.5 billion (in May) is adjusted higher to $5.5 billion deficit for 2018. For next year, the BOP deficit is expected to ease to $3.5 billion.
The latest BOP deficit projection is equivalent to 1.6 percent of gross domestic product (GDP). For 2019, it’s one percent of GDP.
The current account is expected to incur a bigger shortfall of $6.4 billion this year or double that of the projection of $3.1 billion made earlier. The 2018 current account deficit projection is equivalent to 1.9 percent of GDP. Next year, the BSP expects an even larger current account deficit of $8.4 billion or about 2.3 percent of GDP.
As for the GIR, the central bank previously said they expect it to hit $80 billion by end-2018. This estimate is now revised to $76 billion this year and $77 billion in 2019 on account of trade wars and protectionist policies in advanced economies.
MB file photo.
The end-November BOP deficit is higher compared to same period last year of $1.78 billion. In the meantime, the $847-million surplus for November is only the second monthly surplus recorded this year, after $1.272 billion last August. The November suplus is also a reversal of November 2017’s $44-million shortfall.
In a statement, the Bangko Sentral ng Pilipinas (BSP) said “inflows in November stemmed mainly from the BSP's foreign exchange operations and its income from its investments abroad during the month.”
The BSP added that these were “partially offset, however, by the payments made by the National Government for its foreign exchange obligations and its net foreign currency withdrawals during the month in review.”
As for the higher January-November cumulative BOP deficit, the central bank said this “may be attributed partly to the widening merchandise trade deficit (based on the Philippine Statistics Authority's preliminary data) for the first ten months of the year that was brought about by the sustained rise in imports of raw materials and intermediate goods as well as capital goods to support domestic economic expansion.”
The BSP also reported a final gross international reserves (GIR) figure as of end-November, of $75.68 billion.
The country’s GIR represents “more than ample liquidity buffer” and is equivalent to 6.7 months' worth of imports of goods and payments of services and primary income, it said. It is also equivalent to 5.6 times the country's short-term external debt based on original maturity and 3.9 times based on residual maturity.
Last December 14, the BSP revised its external sector projections. The BOP deficit’s earlier projection of $1.5 billion (in May) is adjusted higher to $5.5 billion deficit for 2018. For next year, the BOP deficit is expected to ease to $3.5 billion.
The latest BOP deficit projection is equivalent to 1.6 percent of gross domestic product (GDP). For 2019, it’s one percent of GDP.
The current account is expected to incur a bigger shortfall of $6.4 billion this year or double that of the projection of $3.1 billion made earlier. The 2018 current account deficit projection is equivalent to 1.9 percent of GDP. Next year, the BSP expects an even larger current account deficit of $8.4 billion or about 2.3 percent of GDP.
As for the GIR, the central bank previously said they expect it to hit $80 billion by end-2018. This estimate is now revised to $76 billion this year and $77 billion in 2019 on account of trade wars and protectionist policies in advanced economies.