The country posted a narrower balance-of-payments (BOP) deficit of $44 million in November even as the 11-month position reversed the surplus a year ago due to the outflow of hot money.
Bangko Sentral ng Pilipinas (BSP) data released Tuesday night showed the BOP deficit last month, which meant that more dollars left than entered the economy, was smaller than the $1.67-billion deficit in November last year and the $368 million in October.
“Outflows in November stemmed mainly from payments made by the national government for its maturing foreign exchange obligations during the month in review. These were offset by the net foreign currency deposits of the national government and income from the BSP’s investments abroad,” the BSP said.
At the end of the 11-month period, the BOP deficit widened to a cumulative $1.78 billion compared with $1.74 billion a month ago and $206 million a year ago.
“The higher cumulative BOP deficit for January to November was brought about largely by the big reversal in foreign portfolio investments from $1.3-billion net inflow to $770-million net outflow for the first 10 months of the year,” the BSP said.
Last week, the BSP said it expected the BOP position to settle at a “higher-than-expected” deficit of $1.4 billion. This could be the second straight year of deficit.
“This is due to the projected greater net outflow in the financial account, even as the current account is expected to show a lower deficit,” the BSP said.
The previous BOP deficit projection for 2017 was a smaller $500 million.
In 2016, the BOP position settled at a deficit of $400 million.
The BOP is a summary of all the businesses the country does with the rest of the world. The data are tracked closely to ensure that the supply of dollars in the economy provides a legroom for the government and local 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 and foreign investments and revenues from industries such as business process outsourcing (BPO) 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.