The country experienced a minor reprieve from dollar outflows last month resulting in a slightly lower balance of payments deficit in September, thanks mainly to foreign currency deposits by the government, data from the Bangko Sentral ng Pilipinas showed.
According to the central bank, the Philippines’ total balance of payments — which represents the cumulative net flows of foreign capital into and out of the economy — posted a $24-million surplus in September, reversing a $7-million deficit in August.
The data also showed that the September surplus was offset by debt service payments made by the government that month.
This brought the overall BOP position for the first nine months of the year to a cumulative deficit of $1.367 billion, representing a marginal improvement from the $1.391 billion deficit recorded in January to August 2017.
The country’s total BOP position has been consistently in the red since November 2016 when it swung to a deficit from a $1.46-billion surplus.
The balance of payments deficit mirrors the weakness being experienced by the peso against the US dollar in recent months as capital from the Philippines moved into dollar-denominated assets offshore.
Speaking to reporters last week, BSP Governor Nestor Espenilla Jr. allayed concerns about the weakness in the currency, saying it also benefited large segments of the economy, like exporters who can produce more goods to sell to foreign buyers for the same amount of dollars, and beneficiaries of remittances from expatriate Filipinos who will see their purchasing power increase.
In the meantime, the BSP said the country’s gross international reserves (GIR) level was recorded at $80.962 billion as of end-September 2017, higher by $270 million than the end-2016 level of $80.692 billion.
However, the final GIR level was lower by $385 million than the preliminary GIR level of $81.346 billion due mainly to end-of-month revaluation adjustments on foreign currency-denominated reserves.