The country’s balance of payments position swung to a deficit of $368 million in October, the widest in three months, partly due to a weaker peso.
Bangko Sentral ng Pilipinas data released Monday showed that the BOP deficit last month, which meant that more dollars left than entered the economy, was the biggest since the $678-million deficit in July as well as reversed the $24-million surplus in September.
“Outflows stemmed mainly from the foreign exchange operations of the BSP and payments made by the national government for its maturing foreign exchange obligations during the month in review. These were partially offset by the national government’s net foreign currency deposits and income from the BSP’s investments abroad,” Governor Nestor A. Espenilla Jr. said in a statement.
The peso slid to fresh 11-year low levels in October, hitting 51.77:$1 on Oct. 25, the weakest since July 25, 2006’s 51.87:$1.
At the end of the first 10 months, the BOP deficit further widened to a cumulative $1.735 billion, reversing the $1.465-billion surplus as of end-October last year.
The BSP had said it expects the BOP position to settle at a deficit of $500 million, such that it will be the second straight year that more dollars would leave the country than come in.
In June, the BSP revised its BOP projection for 2017 from the earlier $1-billion surplus projected in December last year.
In 2016, the BOP position settled at a $400-million deficit.
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. /je