Overall BOP position posts $7 million deficit in August

September 19, 2017

The country’s overall balance of payments (BOP) position in August posted a slight deficit of $7 million, lower by $671 million than the previous month’s shortfall of $678 million, the central bank said in a statement on Tuesday.

Outflows during the month were largely offset by the national government's net foreign currency deposits and the Bangko Sentral ng Pilipinas income from its investments abroad. The reduced deficit also reflected the thin trading of portfolio investments during the “ghost” month (August), the central bank added.

On a cumulative basis, the overall BOP position reached a deficit of $1.391 billion from January to August, a turnaround from the $1.531 billion surplus recorded in the same period a year ago.

The cumulative deficit was largely accounted for by portfolio investments  which, for the period January-August this year, reversed to net  outflows of $319 million from $2.1 billion net inflows during the same period last year on the back of domestic and global developments including the US Federal Reserve interest rate hike, global terrorism concerns, and closure orders for some mining companies in the country.

The Philippine Statistics Authority (PSA)-based trade balance showed steady improvement as it registered a narrower deficit of $14.7 billion during the January-July period this year compared to the $15.4 billion shortfall in the same period a year ago.

For the same period, the growth of merchandise exports at 13.8 percent outpaced that of merchandise imports at 7.9 percent. It may also be noted the trade deficit also reflected increased percent share to total imports of raw materials and intermediate goods at 38.6 percent, and capital goods imports at 32.4 percent, indicating continued expansion in domestic economic activity. DMS