PH balance of payments deficit widens to $550 million in March

The country posted a balance of payments (BOP) deficit of $550 million in March, the sixth straight month that the amount of dollars that left the economy was more than those that came in.

The latest Bangko Sentral ng Pilipinas data released on Wednesday showed that last month’s BOP deficit was the biggest in four months, exceeding February’s $436 million, January’s $9 million and December last year’s $214 million.

READ: BOP deficit widened to $436M in February

The deficit in March also reversed the $854-million surplus during the same month last year.

At the end of the first quarter, the deficit widened to $994 million from the $210-billion deficit recorded at end-March last year.

The BOP is a summary of all the businesses the country does with the rest of the world.

BOP data is tracked closely to ensure that the supply of dollars in the economy remains ample to allow the government as well as businesses to transact with the rest of the world.

Sources of dollar income for the country include remittances from Filipinos overseas, sales from exports of goods and services, as well as foreign investments and revenues from industries such as business process outsourcing and tourism.

The country uses the dollars it earns for the importation of goods, such as food and fuel, and also for external debt payments.

The country ended 2016 with a BOP deficit of $420 million.

For 2017, the BSP targets a BOP surplus of $1 billion even as the current account is seen further narrowing to $800 million as the projected 10-percent growth in imports would outpace the 2-percent exports growth.

According to the BSP, the 2017 BOP position outlook was based on the following assumptions: a pickup in the global growth outlook; gradual increase in oil prices; less volatility in global financial markets; as well as continued favorable growth prospects for the domestic economy.

Foreign direct investment net inflows were expected to hit $7 billion this year, while foreign portfolio investment would post a net outflow of $900 million.

Gross international reserves would likely rise to $84.7 billion in 2017, equivalent to 8.8 months of imports, while cash remittances from overseas Filipinos would further increase to $27.7 billion.